Tips on How to Make 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. The responsibility of making pay stubs rests on the shoulder of the employer. Even though it has been realized that the federal law does not require pay stubs, as an employer you need to understand that there are some given states that will require that you produce employees pay stubs on that very day you are paying them. A number of employers always find it very difficult to make pay stubs for their employees simply because they do not have the know-how on how to go about it. Highlighted below are some of the steps you can use to ensure that you make good and quality pay stubs for your employees.
First things first, it is important for you to always determine the gross income of all your employees one by one. The best way to achieve this is by finding out the number of hours an employee has worked and then you multiply it by your rate of pay in which in your case is 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. Determining the multiply for overtime work is quite easy in the process involves taking the number of overtime hours multiplied by 1.5. The gross income of your employee will be the sum of two multiplications you’ve done.
The next thing should be finding out amount to be deducted from the employee’s gross income. You need to understand that regular employees are supposed to be taxed and for this reason, you should ensure that you deduct all the taxes in accordance to the employee’s 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. It is essential for you to ensure that you include the name of company, employees name and your Social Security number. Click here