As an employer or a freelancer, knowing how to create a pay stub is a vital business skill. Not only are paystubs necessary for tax, healthcare, and pension reasons, but employer-provided paystubs are also mandated by law in many states.
Fortunately, creating a legally compliant, professional paystub for employees has never been easier. Thanks to digital paystub generators, you can make a pay stub online in just a few seconds.
You do not need to hire an accountant or spend huge amounts of money on a payroll team for your company. Here is exactly how you can create flawless paystubs in just five simple steps.
1. Select an Online Paystub Generator
If you want to know how to make a pay stub, the first thing to do is select an online paystub generator. You can use professional, well-known platforms such as The Pay Stub to create paycheck stubs in just a few minutes.
You will have many options for the kinds of paystubs you want to create, which will differ depending on the industry you work in, the deductions you need to make, and more. Once you have chosen the right paystub for you, all you need to do is fill it out and print it.
2. Understand the Information on a Paystub
According to gordonlawchicago.com - any pay stub creator will require you to fill out some important pieces of information that ensure your pay stub contains all of the required data. While pay stubs differ in different industries, there is some information that is required on any stub, such as:
3. Calculate Gross Pay for Employees
The next step is to calculate the gross pay for the employee who the pay stub is for. This is essentially the total amount they are paid before any taxes or deductions are taken out. It should include hourly earnings, as well as tips, commissions, and wage garnishments.
All of these different earnings should be written on separate lines and clearly identified as such.
4. Calculate Deductions for Employees
To calculate the net pay, you will need to add all deductions and subtract these from the gross pay.
This will include taxable deductions such as uniform fees and travel expenses. It will also include non-taxable deductions such as life insurance, health insurance, and 401K contributions.
5. Create a Paystub and Distribute It
Once you have all of this information, the next step is to get your pay stubs out to your employees.
While many employers still mail physical paystubs to all employees, this is no longer necessary. You can email paystubs directly to employees as PDF files or store them in a shared, secure drive.
More Essential Business Advice at Your Fingertips
Knowing how to create a pay stub is just one of the essential business skills that you need to run a functioning, compliant, and professional operation. For more essential advice on how to run your business like a well-oiled machine, we have got you covered.
Simply explore our expertly-curated Business Section to stay on top of all of the skills and life hacks you need to help your business thrive.