One of the most important functions of accounting and HR is to ensure employees get their pay. A paycheck stub example will cover everything from employee pay to tax deductions.
Keep reading to learn what you should put on your pay stubs and why the information is important.
Employee and Employer Information
A good pay stub example will include the name and contact info for the company and the employee. Company information can include the name, address, and phone number.
Employee information might include the individual’s social security number and address.
Including employee information helps keep employees from accidentally getting other pay stubs. Company information can be useful for employees who work two or more similar jobs.
The information is also useful if someone leaves a job in the middle of the year but needs the pay stub for their taxes.
Pay Period Dates
To differentiate a paycheck stub from month to month, you’ll also find the pay period dates. The dates should show the beginning and end of the pay period to help with record keeping.
You may also find a paycheck stub example with the pay date on it. That can be useful if a pay date is the following month or year.
It can also help employers prove when they pay their employees. That way, they can show they aren’t breaking any laws.
If employees need to refer back to a specific pay period, the dates can help them, too.
You’ll also find the pay rate somewhere on a pay stub. The pay rate will either be the salary or the hourly rate depending on an employee’s status.
Salaried employees will get the same amount each paycheck, but it’s still important to include this information.
Hourly employees will be able to see the number of hours worked in a pay period and their hourly rate. If an employee worked overtime, the pay stub should notate that.
When hourly or salaried employees use paid time off, that will also be reflected on most pay stubs. The base pay will determine the rate for other types of pay and compensation.
Probably the biggest section on any payroll check template is the earnings breakdown. This section lists everywhere an employee’s pay goes, from their check to taxes.
The breakdown typically starts with an overview of gross income, which is your earnings before taking anything out. Next, you can have a list of the different income taxes for social security and other purposes.
If the employee contributes to a company-sponsored retirement plan, these contributions will be on the list. The same is true with company health insurance and other benefits.
You may also list the amount of taxable income for employees who pay into retirement or other pre-tax deductions.
Your Best Paycheck Stub Example
Whether you’re looking to hire employees or rework your payroll system, consider a paycheck stub example. You can use the example to figure out what to include and how to format everything.
Then, you can make sure you and your employees understand the pay breakdown, and you can avoid pay-related issues.
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