Although federal law does not require employers to provide employees with pay stubs to indicate their amount of pay, deductions, and contributions, many states in the US have laws requiring some written form of pay statement. Even if you are not in a state that requires payment stubs, the Fair Labor Standards Act requires you to keep track of the hours your employees work. Regardless, pay stubs have many benefits for both employers and employees, so as an employer, you should definitely use them. Furthermore, even if you are self-employed, you should create pay stubs.
Use an Online Pay Stub Generator to Create Your Pay Stub
If you are a business owner, you need to generate pay stubs for your employees. As an employer, having records of employee pay on pay stubs is useful for tax purposes and also for resolving any discrepancies over pay with employees. Pay stubs benefit employees as well because it helps them to understand their taxes and keep a record of their wages, including all deductions and contributions, as well as ensuring they have been paid correctly. Furthermore, a pay stub can also serve as proof of income, which is often needed for things like applying for an auto loan or mortgage.
If you are a self-employed freelancer, you will also need to prove your income for things like getting a mortgage, renting a property, and applying for health insurance. But how do you do that when you do not have an employer who gives you a pay stub? The answer is to simply create your own. Pay stubs are often a sufficient form of proof of income. In addition, creating your own pay stubs allows you to keep track of your income and will make it easier to do your end-of-year taxes.
So, whether you are an employer or a freelancer, you need to create pay stubs. Fortunately, in this modern-day and age, it is simple to do so. With this online paycheck stub maker, you only need to answer a few questions to instantly create your pay stubs.
Information to Include on a Pay Stub
When you use an online pay stub generator, all of the hard work is done for you. But you still need to consider what information needs to be included on the pay stub. Typically, a pay stub includes the following:
Employee or freelancer information, such as his or her name, address, and social security number.
The dates of the payment period.
Taxes withheld, such as local taxes and federal income tax.
Employee contributions, such as to pensions.
Deductions, such as for life insurance or health insurance.
Overtime, if an employee has worked overtime during the payment period at a different rate of pay.
Net pay, which is the total amount that the employee or freelancer receives after all taxes, contributions, and deductions have been subtracted from the gross earnings.
Physical or Digital?
Whether you use a pay stub generator or make your own (the former will help you save a lot of time and ensure the information on the pay stub is accurate), there are basically two types of pay stubs you can generate: physical and digital ones. A physical pay stub is typically attached to a paper paycheck via perforation. A digital pay stub can be accessed online. Sometimes pay stubs are sent via email or in the cloud, but most employers enable employees to access digital pay stubs via their own online payroll systems. You may prefer to create paper pay stubs, but adopting online pay stubs is the way the business world is quickly heading.