A successful business requires handling several tasks or delegating them to your employees. However, it’s easy to opt for the second option when the company is not new and has achieved some success and, thus, gains profit. Small business owners must handle everything independently until the business starts bringing profit. One such task is creating pay stubs.
There are a few options for companies who want to make pay stubs and provide them for their employees. An employer can use the traditional one and fill out a pay stub with a pen, use accounting software, or utilize a simple generator. This article focuses on the last option since it’s the most affordable one and perfect for small and mid-sized businesses.
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What Is A Pay Stub?
A pay stub (short from paycheck stub) is a paycheck attachment which includes critical information about an employee’s current salary. If a company still sends paper paychecks to their employees, the pay stub is usually automatically attached to show all the calculations and details. If the check is electronic, the pay stub is also electronic. Sometimes, the company may simply give access to a website so workers download pay stubs.
The document typically shows a worker’s salary during each payday and the overall yearly income. However, it’s not the only detail the document includes. Typically, the document shows a clear calculation of their income. The pay stub includes the following:
- The gross income. It’s a person’s earnings before deductions and withholdings.
- Deductions. That’s the list of all deductions an employer withholds, and they go to the IRS or other organizations.
- The net income. It’s the sum of money an employee receives when the employer withholds all deductions from the gross income.
The pay stub also includes general information, such as who pays the salary (employer name or company name), the address of the company’s location, the employee’s name and address, etc. The document also contains the dates of the salary period and when the paycheck is delivered, along with the pay stub.
Federal legislation does not regulate pay stubs. In fact, employers aren’t even supposed to send pay stubs according to federal laws. However, most states oblige employers to send pay stubs or at least provide them per employee’s request. However, the pay stub has multiple benefits for employers and employees.
Employers can store pay stubs in separate folders or even categorize them by employee names. Thus, the company has access to critical employee data. Moreover, it’s easier to calculate deductions when it’s tax season.
Employees understand how their salaries are calculated, which gives them better insight into how the process works. Employees see what taxes they pay and what benefits they deserve since they pay for them. Moreover, a pay stub can work as proof of income, so it should be easier to apply for a loan or a mortgage with comfortable rates and conditions.
Pay Stub Creating Tools
As mentioned, there are three main options when creating pay stubs. We won’t discuss the traditional one but focus on the two best options:
- Accounting software tools.
- Pay stub online generators.
The first option may be one of the best since it also contains other useful tools. The employer can store documents in the cloud and access them from any device. Moreover, it’s possible to convert paper receipts to digital ones for easier deduction calculations. Overall, accounting software enables you to store documents, handle payroll (including pay stubs and salaries), prepare for taxes, and much more.
However, if this option is unavailable due to limited business resources, it’s possible to use standard online generators. You can use convenient and safe tools, such as Shopify’s generator or Real Check Stubs, to create pay stubs.
How To Create A Pay Stub?
If you decide to use an online generator tool, opt for paid ones or from reliable software developers. For instance, Shopify offers free tools. However, they are limited. Yet, you know that this service is a safe option.
The procedure to create a pay stub is standard for all generators. Here’s what you should do:
- Create an account.
- Choose a pay stub template.
- Fill out the necessary data (most tools guide customers through this process).
- Preview the document.
- Create a pay stub.
Then add your email address so that the service delivers all pay stubs to your mailbox. Then you can distribute these documents among employees.
Do’s And Don’ts When Creating Pay Stubs Via Generators
Handling payroll and creating pay stubs is a regular responsibility of business owners. Check out the do’s and don’ts when using pay stubs via online generators.
Do’s When Using Generators
Here is the list of what to do when you make pay stubs via pay stub generators:
- Proofread and review the document. It’s a critical tip for generating the pay tab for the first time. Typically, automatic generation reduces human error, but do ensure you’ve included everything necessary.
- Ensure you include all required data. If you need to know what data to include, check with the local or state laws. Federal law doesn’t require employers to generate these documents, but local laws do. Thus, you can find guidelines.
These are the main “do’s” when using a generator tool.
Don’ts When Using Generators
There are a few important things to look out for and avoid doing. The list includes the following:
- Don’t use free generators. Consider using reliable and affordable tools like Real Check Stubs or the Shopify generation tool. Free services aren’t safe and accurate.
- Remember to generate pay stubs every pay period. You must be ready to generate pay stubs according to local laws.
These do’s and don’ts will be helpful for your business.
Creating pay stubs is a tedious task. However, using an automated generator tool or accounting software may be easier. It still takes time since you must insert the personal data of each employee, but the calculations are more accurate, and you can avoid typical human errors or typos.