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. 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. Highlighted below are some of the steps you can use to ensure that you make good and quality pay stubs for your employees.
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. Another thing you may want to consider when calculating gross income is the overtime hours the employee has worked. The next is to take the number of overtime hours and then you multiply it by 1.5. Adding the amount, you obtained from the hours the employees worked and overtime work should give you the gross income of that particular employee.
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. Another thing you should deduct is Social Security and Medicare. Obtaining the employee’s deductible amount for Social Security is very easy because all you need to do is take 0.062 and multiply it by the employee’s gross income and then take 0.0145 and multiply it by employee’s gross income to obtain the deductible amount for Medicare. After subtracting all these deductions, what you are left with is termed as net income. You should never forget to include the name of your company, employees name and Social Security number as well as the date of pay period. View here for more