Effective Ways 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.
The first thing you need to do as an employer is try and calculate the gross income of each of your employees. 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. Multiplying the number of hours, the employee worked overtime by 1.5 will give you the total amount of money you will be paying that particular employee for overtime work. When you are the two amounts that you have obtained, you will come up with the gross income of your employee.
The next thing should be finding out amount to be deducted from the employee’s gross income. It is important to understand that each employee has a different withholding rate and they are obligated to pay tax hence, you should ensure that you deduct tax in accordance to employees withholding rate. It is important that you see to it that Social Security and Medicare are deducted. 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. The amount that remains after the deductions is what is known as the net income of employees. Click here for more It is essential for you to ensure that you include the name of company, employees name and your Social Security number. Click here