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. 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.
First things first, it is important for you to always determine the gross income of all your employees one by one. 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. Overtime hours is another important thing you need to consider. The next is to take the number of overtime hours and then you multiply it 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. 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. 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