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Payslips and paystubs: Feature Article
If you own your own business then you are aware of the fact that every business needs some way that they can record the amount of money that their employees receive every payday. The best solution for this is to provide yourself and your employees with something called payslips or paystubs. What these things do is they display how much tax and insurance has been deducted from each check, along with the employees' gross pay and net pay. Pay stubs are something that is required whether you have a large or a small business if you have more than one employee.
Here are some of the more popular options that you have when it comes to obtaining payslips for your company.
Number one:
Print out a pay stub template online. One of the best things about this method is that you can find a wide range of pay stubs that you can choose from. But keep in mind that most of the ones that you will find online that are for free or cheap are going to have a simple format. What this means is that they are not going to leave you with much room for creativity, but you can't beat the price of free. It is because of the price that this option is the most popular route to take because all you have to do is supply the paper and print your new payslips. Here are some places that you can check out for simple and free or cheap pay stubs:
Microsoft
This is one of the most popular ones because of how simple the pay stub is and how easy it is to download.
One-on-One Learning Center
Makes simple paystubs slips by using Microsoft Excel. They charge you a very low price for the template that you can use. Plus having the template saves you the time that it would take to make your own.
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Number two:
Use general office programs to create your business payslips. This works whether you want to create and print out blank payslips to fill in with a pen later or if you want to type in all of the information into the payslip immediately. No matter which option you choose you can use well known programs to create these payslips. Pretty much everyone has some type of spreadsheet program available on their personal computers and most work computers come with these programs as well. In fact the most popular program that you will find is going to be Microsoft Excel. But what program you are going to end up using is going to depend on if you are using a PC or a Mac.
Helpful Resources: 1. Payslips This website provides you with a short article about the various things that you can do to obtain payslips for your employees, but it also provides you with links to a variety of other resources that you can use for payslips. 2. Payroll 3. Pay Stub Requirements 5. Are pay stubs required? 6. Paystubs for Freelancers 7. How to generate in Excel a pay stub with a "Year to Date" column 9. Pay Stub Form 10. Labor Employment Law Blog |
Here is a look at the programs for a Mac and a PC:
Hewlett-Packard
This is a free course that is designed to teach you about the popular Excel program. It is designed to keep you up to date on the newest formulas on Excel, including the most popular pay stub formula.
MYOB AccountEdge
This is a program for Mac users that allows you to choose between controlling your own payroll and using their full service option. But no matter which method that you choose to use you can always create your own pay stubs and email them to your employees.
Number three:
Use payslip software to develop your own pay stubs. This is a great option for companies to choose if they plan on updating the way that they are handling their payroll in general. You can actually go and purchase a program that is specifically designed to perform these functions. But the best part is that most of these programs that are available also allow you to create your own pay stubs, but keep in mind that they also come with complete payroll systems. So before you decide on this option you are going to want to make sure that you need a new payroll system prior to purchasing the software. Here is a look at some of the more popular programs that are offered:
Sage Software
This program allows you to do your payroll online and create payslips at the same time for your business. The best part about this program is that the company who makes the program provides you with a free demo of the program so that you can try it to decide if it is the right program for your needs.
iEmployee Pay Stub and W2
This program is a great option because it allows your company to save both time and money. The reason for this is because it does not require you to print out every pay stub. In fact what it does is it notifies your employees by email that a new pay stub is ready to be viewed. And once the employees view the pay stub they then have the option of printing out their pay stub.
Now that you know of the various options that you have when it comes to creating your pay stubs you are going to need to learn about what you should include on your pay stubs for your employees. In fact by law there are certain things that you have to include on your employees pay stubs, but after that anything else that is included is optional. Here is a look at the items that you must include by law on a pay stub:
- Gross Pay - this includes the total amount of income that your employee has earned during a certain pay period, the pay period that the paycheck is issued for. The actual pay period that they are paid for is determined by you, but the most common pay periods are bi-weekly or monthly. Keep in mind that the gross pay does not factor in tax withholdings.
- Net Pay - this is the amount of money that the employee is going to take home after all of the withholdings have been applied. It is the amount of money that will be deposited into their bank account.
- Federal Tax Amount - this amount is in direct relation to the W-4 form that you filled out when you were first hired by your employer. The purpose of this form is to cover any tax that you might owe to the Federal government come tax time. How it works is the money is deducted incrementally from each paycheck, how much is deducted is going to depend on the number of exemptions that you choose to claim.
- State Tax Amount - how much is withheld if any is withheld is going to depend on what state you reside in. If your state collects state income taxes, which most do, it is deducted from your employees paychecks the same way that federal taxes are deducted. It is intended to deduct the amount of state taxes that you will owe your state when your state tax return is filed.
- Local Tax Amount - this tax is a pretty rare tax, but at times you will find that certain cities, counties or school districts apply a local tax. A perfect example of this is if you live in New Jersey but work in New York City you will have to pay New Jersey state tax, but also pay New York City tax on your earnings.
- Social Security - this is required by the federal government and must be withheld from every employee's paycheck. How much withheld is based on a percentage rather than an amount based on deductions. But this is withheld because it is entitling you to receive a monthly social security payment upon retirement. The amount that is withheld from your paycheck each time is subject to annual increase. Currently 6.2% of an employees monthly earnings are withheld for Social Security and you as the employer are required to pay the other 6.2%.
- Medicare - this works similar to social security withholdings in the fact that they are mandatory. All employees must pay 1.45% of their paychecks to Medicare and the employer has to pay an additional 1.45%. Once the employee is eligible for social security they are entitled to coverage for a majority of their medical expenses which is paid for through Medicare.
- Year-to-date (for pay and deductions) - this section is designed to show how much the employee has paid toward a certain withholding at any point in the calendar year. But it is also used to show how much net pay and gross pay the employee has received any time in the calendar year.
The above items are the only items that are required to be included on pay stubs by law. Here are some of the additional items that some companies include on their pay stubs:
- Childcare Assistance - is usually shown as a pre-tax benefit
- Leave Time - includes sick and vacation days. Most employers include days used and how many remaining
- Retirement PlanContributions - includes plans such as 401K or 403 (B) retirement savings plans
- Insurance Deductions - payments for medical, dental, and life insurance each pay period
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