Essential Steps to Follow When Making 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. As an employer, it is important for you to understand that you are supposed to be making pay stubs for your employees. Although the federal law does not dictate that pay stubs be made and presented, there are a number of states that require that pay stubs be presented within 24 hours of the employees pay date. You cannot shy away from the fact that the quite a number of employers who do not have a clue on how to make pay stubs for their employees. Outlined below are some of the tips you can use to ensure that you make pay stubs for your employees in time without committing any error in the process of making them.
First things first, it is important for you to always determine the gross income of all your employees one by one. You need to ask yourself that how many hours that particular employees have worked for and then you multiply the number of hours by the rate which you have put as 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. When you are the two amounts that you have obtained, you will come up with the gross income of your employee.
What you need to do next is to try and do a calculation on the numerous deductions. 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 to note that the law requires that all employers match social security and Medicare deductions and therefore you should ensure that you make these deductions on your employer’s gross income. 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. Some of the things that are required when making pay stubs for your employees is the name of that particular employee, Social Security number as well as the name of your company.
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