Things you should include on your employees’ payroll
When it comes to running a successful business, a number of factors come into play and require special attention. Pay stubs are known by various names in different companies. Some call it a paycheck, while others call it a payslip, and there are still some that refer to it as a payslip. Whichever name you give it, the function of a pay stub remains the same: it is a detailed statement of your employee’s salary during each period. It is very helpful for them to declare their sources of income while making huge purchases like a house or getting a loan from the bank. Pay stubs are also often requested from their new job as proof to ensure that they have received said income in recent months.
So what makes your employee’s payslip so critical in the areas of taxation and job changes? Its importance is in the details, and that’s what we’re here to explore. While a pay stub contains a lot of useful information about their income, there are four important details that absolutely must be present on this piece of paper.
1. Personal informations
Everything from your employee’s full name to their Social Security Number (SSN) should be on the pay stub. Are they worried about entering their full SSN on the slip? Completely understandable! This is why the Internal Revenue Service (IRS) recently authorized the use of truncated SSNs (last 4 digits) on payslips. It should also include your name (employer) and your business and / or residential address.
2. Gross salary
Most employees tend to look directly at take-home pay, pay on hand, or how much is actually credited to their account. They completely ignore the gross salary section, the one that has all the important details. If your company’s accounting team uses an automated pay stub creator for the statement, there is bound to be the gross salary section. Here, your employees can see how much taxes have been reduced and what other deductions have been made that constitute their take home pay. Other contributions like pension funds, health insurance, travel allowances, etc. can also be found in this section.
3. Tax evasion
You don’t want your employees to end up paying more taxes than they need to. Have them verify the number and amount of taxes withheld for the government, and let them calculate the exact value of any possible discounts that might be given to them. After all, a pay stub is filled out by another employee, and sometimes humans can make mistakes.
4. Net payment
We’ve finally come to the most interesting part of a payslip, the main reason your employees are so impatiently waiting for their stubs – the net payment. Who doesn’t like to keep watching how much money gets credited to their account each month? The take-home pay is essentially their gross pay cleared of all taxes, deductions, insurance, investments, etc. It is the amount they can use to spend when they feel like it.
There are plenty of other technical details included in a pay stub, but the aforementioned four are must-haves. If even one of these is not present on any of the slips, encourage your employees to immediately contact the accountant or human resources staff and request a new statement.