Tips on How to Make Pay Stubs for Your Employees
One of the basic requirements of applying for mortgage or being able to file tax is that you have to present your pay stub and this is the reason why quite a number of employees as supposed to have a pay stub. The responsibility of making pay stubs rests on the shoulder of the employer. There are quite a number of employers that are always adamant due to the fact that the federal law does not require that pay stubs be made. Some employers find it very hard for them to come up with quality pay stubs for their employees and one of the reasons why this is so, is that they do not have the knowledge on how to go about it. Making pay stubs for your employees can be quite easy and following the guidelines that have been highlighted underneath you will be able to make good ones.
First things first, it is important for you to always determine the gross income of all your employees one by one. This can be achieved by ensuring that you determine the number of hours that particular employee has worked and then you multiply the number of hours with the standard rate of pay. Overtime hours is another important thing you need to consider. 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. 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 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. 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. You need to understand that the amount of money that will be left after deducting the deductions highlighted will be the net income of your employee. 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.
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