Tips on How to Make Pay Stubs for Your Employees
Pay stubs are very important for quite a number of employees especially in cases whereby employees would want to file their tax or even they have plans of applying for mortgage. Employees are always tasked with the mandate of ensuring that the employees are continuously presented with their pay stubs for this is their responsibility. Although the federal law does not dictate that pay stubs be made and presented, there are a number of states that require that pay stubs be presented within 24 hours of the employees pay date. A number of employers always find it very difficult to make pay stubs for their employees simply because they do not have the know-how on how to go about it. Highlighted below are some of the steps you can use to ensure that you make good and quality pay stubs for your employees.
The first thing you need to do as an employer is try and calculate the gross income of each of your employees. The best way to achieve this is by finding out the number of hours an employee has worked and then you multiply it by your rate of pay in which in your case is the standard rate of pay. You need to ask yourself whether that particular employee has worked for a number of hours that are not counted for in a day’s work. Determining the multiply for overtime work is quite easy in the process involves taking the number of overtime hours multiplied by 1.5. Adding the amount, you obtained from the hours the employees worked and overtime work should give you the gross income of that particular employee.
The next step should be calculating the deductions to be made on the gross income of employees. It is important to understand that each employee has a different withholding rate and they are obligated to pay tax hence, you should ensure that you deduct tax in accordance to employees withholding rate. Another thing you should deduct is Social Security and Medicare. This can be achieved by ensuring that you multiply your employees’ gross income by 0.062 and for Medicare it is important that you multiply your employee’s gross income by 0.0145. The amount that remains after the deductions is what is known as the net income of employees. Click here for more Some of the things that are required when making pay stubs for your employees is the name of that particular employee, Social Security number as well as the name of your company.