What Are Pay Stubs and What Is on Them?

A pay stub is an essential business document that every employer must be familiar with. After all, pay stubs contain all the important information about employees’ salaries, voluntary deductions, benefits, and tax obligations. If an employee cannot access their pay stub through an online portal or does not receive a physical copy, they can typically request one directly. Contacting the human resources (HR) department or the payroll office is the standard procedure for obtaining copies of current or historical pay stubs. These departments can provide assistance or issue duplicate documents as needed. Employees receiving direct deposits can usually access their pay stubs electronically.

What information should be included in a pay stub?

Pay stubs act as official payroll records, which make it easier for your business to track payments, deductions, and tax filings. If there’s ever a dispute or an audit, having accurate pay stubs can help you resolve the issue. Voluntary post-tax deductions are withheld after taxes have been calculated and do not reduce taxable income. Examples include Roth 401(k) contributions, union dues, and certain life or disability insurance premiums. Wage garnishments, which are legal orders for employers to withhold a portion of earnings for debts like child support or unpaid taxes, are also post-tax deductions. Many employers provide online employee portals where pay stubs can be viewed, downloaded, and printed.

The stub is something the employee can use to confirm what funds were withheld from the gross pay that led to the final net pay amount. There is no federal law that requires employers to provide employees with pay stubs, though most states do require employers to provide a pay stub. Many pay stubs also feature year-to-date (YTD) totals, showing cumulative earnings and deductions from the beginning of the calendar year. If you are an hourly employee, the stub details hours worked, often broken down into regular and overtime hours, alongside your hourly rate.

Do I have the right to review my payroll records?

• When reviewing your pay stub, confirm the accuracy of your hours worked or salary amount.
• The contact information of both the employer and the employee should be readily available on the pay stub to ensure accurate payroll processing.
• Besides this institution, there are also a few other laws that require you to keep these documents for a specific amount of time.
• Pay stubs provide employees with clear records of their wages, taxes withheld, and other contributions.

In opt-out states, if an employer changes to digital pay slips, they must make it easy for employees to opt out in favor of paper pay slips. Pre-tax deductions are a way of reducing some income before tax rates are applied to them. After-tax deductions include retirement contributions in Roth style.

Incomplete Paycheck Stub Information

This also helps the employee to understand What Is A Pay Stub, And What Information Is Included In A Pay Stub their pay and check for accuracy. The net pay might be significantly lower than the gross pay depending on the size of deductions. To read a salary pay stub properly, you should subtract pre-tax deductions, employee taxes, and employee contributions from gross pay. This way, you’ll get the exact amount of the salary your employee should receive.

This information is important for ensuring that you are being paid correctly. It can also be helpful if you need to request time off or take a leave of absence. Also, if the IRS audits you, pay stubs can be easily accessed and provided as documentation. While paper pay stubs can also be used for this purpose, they may be harder to track down if you’ve moved or changed jobs since they were issued. This system must meet the criteria of being “objective, reliable, and accessible.” A payroll system that tracks hours and pay rates can help employers fulfill these requirements.

Pay Period and Pay Date

You should immediately report the issue to your employer or HR department to address discrepancies. With any luck, the employee will catch the error on the pay stub and bring it to your attention; the mistake won’t repeat through several pay cycles. There are separate boxes for federal taxes and state or local taxes if they apply. That one usually stumps people who are new to the workforce, but it’s easily explained. We will show you 25 ways to show proof of income, so you can move forward in your application process. You can also add the payroll processor logo if you hire a third party service to manage your payroll or upload the logo of your company instead.

• Pay stubs are like receipts for the employees and provide liability to your business.
• Pay stubs typically include information on both the employee (including name, address, and social security number) and the employer (including company name and address).
• Federal income tax is withheld based on information provided on the employee’s Form W-4.
• The cumulative year-to-date figures on your final pay stub should align with information reported on your Form W-2 for accurate tax filing.

That’s why most salary pay stubs need to contain direct deposit details, such as bank account numbers, bank routing numbers, and other information if necessary. The pay rate specifies the amount paid to an employee, whether they are paid a fixed or hourly rate. Each employee’s pay rate is typically specified in their employment contract. It also helps employers determine whether they qualify for overtime pay and minimum wage or not.

However, understanding how to read a paystub can assist in managing your income. You may also make additional employer contributions, like contributing to insurance premiums or your employee’s retirement or savings plan. All the important details of the employee like name, phone number, social security number and home address on a pay stub.

Various deductions are then itemized, starting with pre-tax deductions that reduce an employee’s taxable income. Examples include contributions to a 401(k) retirement plan, health insurance premiums, and flexible spending account (FSA) or health savings account (HSA) contributions. These deductions are subtracted from gross pay before income taxes are calculated. For tax reporting, pay stubs provide a detailed record of an employee’s earnings and deductions, making it easier to complete tax returns.

These deductions determine how much you receive in your final paycheck. Employees may contribute a percentage of their gross wages to health, dental, vision, or other insurance options provided by your company. The amount that the employee shares should be included on the pay stub.

Up next, we’ll delve into the legal requirements surrounding pay stubs and the importance of adhering to them. It is the amount that you’re left with after all taxes and deductions have been removed. This amount is what employees receive in their bank account as their final pay.

Tax preparation (for employees)

This represents the number of hours the employee worked during that pay period. Now at the land border, travelers will be issued I-94s electronically and will no longer receive a paper I-94 stub. CBP encourages travelers requiring an I-94 to use the CBP GO mobile app or the CBP I-94 website to apply for their I-94. VWP travelers are encouraged to use the I-94 website or CBP GO mobile app to apply for an I-94 in advance. Understanding your pay stub is just one part of managing your career and financial well-being.