Effective Ways to Make Pay Stubs for Your Employees
The importance of pay stubs can never be underestimated in the world today especially in instances where employees have to file for the attacks or in situations where the employee has a need and want to apply for mortgage. As an employer, it is important for you to understand that you are supposed to be making pay stubs for your employees. Even though it has been realized that the federal law does not require pay stubs, as an employer you need to understand that there are some given states that will require that you produce employees pay stubs on that very day you are paying them. You cannot shy away from the fact that the quite a number of employers who do not have a clue on how to make pay stubs for their employees. Outlined below are some of the tips you can use to ensure that you make pay stubs for your employees in time without committing any error in the process of making them.
First things first, it is important for you to always determine the gross income of all your employees one by one. You need to ask yourself that how many hours that particular employees have worked for and then you multiply the number of hours by the rate which you have put as the standard rate of pay. Another thing you may want to consider when calculating gross income is the overtime hours the employee has worked. Multiplying the number of hours, the employee worked overtime by 1.5 will give you the total amount of money you will be paying that particular employee for overtime work. The gross income of your employee will be the sum of two multiplications you’ve done.
The next thing should be finding out amount to be deducted from the employee’s gross income. Given the difference in its employees withholding rate, it is your obligation as an employer to ensure that each employee pays tax and for this reason, you should see to it that you deduct both federal and local taxes depending on the employees withholding rate. Another thing you should deduct is Social Security and Medicare. It is important to note that the best way to obtain Social Security deduction is by ensuring that you multiply your employee’s gross income by 0.062 and by 0.0145 when you want to determine the Medicare deductions. 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.
Suggested Post: over here