There are multiple parts to owning a business. Payroll is one of them. Making pay stubs is one of the final steps in the process.
Before you reach that step, many things go into doing payroll. Getting things wrong can become a costly mistake with legal implications. Not to mention the harm it can cause your employee if they are underpaid.
If you’re lucky enough to have a payroll specialist, everything is handled in-house. Some businesses choose to outsource their payroll. In some instances, companies use a professional employer organization (PEO) to offer benefits and limit payroll liability.
Whichever route you choose, your employees should receive a record of their payroll deductions. Keep reading to learn more about the benefits of providing pay stubs.
Making Pay Stubs Is Simple
The benefit of providing employees with a pay stub is providing them with an accurate record of their payroll and year-to-date information. In the world of business and technology, paychecks are becoming a thing of the past.
More companies are moving toward direct deposit as the only method of payment. Employees without bank accounts are using non-traditional debit cards to receive their pay.
Creating pay stubs is a record of those deposits and serves as a check and balance.
Technology has also made it easy to generate pay stubs. In some instances, the pay stub isn’t printed by the employer and handed out on payday. Instead, the employee goes to an online portal to print the pay stub, if needed.
Pay Stubs Itemize Deductions
Create check stubs for your employees to provide an itemized record of their payroll. Pay stubs include information on various deductions, including:
- Rate of pay
- Tax deductions
- YTD deductions and earnings
- Employee designation of hourly vs. salary
By seeing these deductions printed out on the pay stub, employees have a clearer picture of their actual take-home pay.
Employees Have a Record of Hours Worked for Legal Matters
Sometimes employees need to show their pay stubs for various purposes. A common reason is when completing applications for loans or services.
Creating pay stubs at the last minute can cause delays. When the employee has access to the pay stubs, they can save time and not have to worry about accuracy.
Another benefit of making pay stubs is when tax time rolls around. Businesses have until January 31st to mail W-2’s, which is a form showing the employee’s annual earnings.
If an employee wants a head start on filing, they can use their final pay stub of the year, instead.
Keep It Professional!
Making pay stubs for your employees is the professional way to handle payroll. It also cuts down on confusion. If an employee feels their pay is incorrect, they have the pay stub to reference before calling the office.
Running a business has a lot of moving parts. Processing payroll is an event that will take place on a regular basis. If you enjoyed this article, check out more great information in our business section.