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Essential Steps to Follow When Making 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. Employees are always tasked with the mandate of ensuring that the employees are continuously presented with their pay stubs for this is their responsibility. 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.

The first thing you need to do as an employer is try and calculate the gross income of each of your employees. 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. You need to ask yourself whether that particular employee has worked for a number of hours that are not counted for in a day’s work. The next is to take the number of overtime hours and then you multiply it by 1.5. When you are the two amounts that you have obtained, you will come up with the gross income of your 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. It is important that you see to it that Social Security and Medicare are deducted. It is important to note that the best way to obtain Social Security deduction is by ensuring that you multiply your employee’s gross income by 0.062 and by 0.0145 when you want to determine the Medicare deductions. After subtracting all these deductions, what you are left with is termed as net income. 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.