Pay Stubs and Your Business: What Should You Include on a Pay Stub?
Even though direct deposit is a popular method payment for many businesses today, paper paychecks are here to stay. And even if you pay your employees via direct deposit, you still need to provide them with a digital or printed pay stub.
Pay stubs help workers track how much of their pay is being deducted for taxes and health insurance, how much vacation time they’ve earned, and how much they’ve contributed towards a retirement plan. They can also come in handy when people need to show proof of employment for a mortgage or other loan. Plus, it’s just good accounting practice for companies to keep detailed records of what it’s paying its employees.
So, what should you include on a pay stub? Here’s a general list of items that a pay stub should display.
Employee Name and Pay Period
Let’s start with the basics. A pay stub should include the employee’s first and last name, mailing address optional.
You also want to include the pay period in two stated dates, and the date that the payment was issued to the employee.
How many hours the employee worked during this period should be included next, along with the pay type (hourly or salaried.)
Gross pay is the employee’s initial pay for that pay period before any deductions are made.
Federal income tax, state taxes, social security, and other government withholdings should be listed on a pay stub. You may want to include any employer taxes in a separate section.
Health and Retirement Plan Deductions
Employee contributions for the company’s health insurance plan and any 401K programs should be included.
Vacation and Sick Time
A pay stub should show any vacation or sick time used during the pay period along with how many days remaining for each. If your company allows employees to accrue personal time off, it’s crucial to update this on each pay stub so workers know how much is available for them to use.
If your business participates in any 401K or medical matching programs, the pay stub should show the contributions for the pay period along with a separate column for year to date.
The net pay is the final amount owed to an employee once taxes, health plan contributions, and other deductions are taken out.
Create Pay Stubs Fast With an Online Pay Stub Generator
If any of this seems confusing or you’re still not sure what to include on a pay stub, an online pay stub generator such as The Pay Stubs can make the task a little easier. Using an online platform will ensure you’re including all necessary fields and allow you to customize the template to match your business.
Never Ask What Should You Include on a Pay Stub Again
“What should you include on a pay stub?” is a question you never need to ask again by following the above pointers. We’re sure that as a company’s owner you’d like to keep a record of your own paychecks as well, which is why pay stubs are so important.
Check out our other business posts for more helpful tips on managing all aspects of your company, from public relations to customer service.