Do you know the importance of pay stub template? Have you realized that when you get your salary, you also get the pay stub paper – which provides transparency over the money you get? Not many people understand the importance of the pay stub although such a thing is usually provided and available with your paycheck.
Understanding the Pay Stub Meaning
What is a pay stub, really? It is actually the paper given to employees containing the information of their pay in details. The pay stub usually contains the exact amount of the payment and then with the deductions and the final result. As the employee, you understand how much money being deducted (for tax, etc) and how much money you will get in the end. Depending on your job, the deductions can only be one or two or it can be more.
Is the pay stub important? Yes – it is important for both employees and employers. For employees, they have the knowledge of transparency. In case there is an inconsistency, they can immediately notify their employers. For the employers, the pay stub is like the written proof of the entire calculation. It provides transparency so the employers won’t be accused of cheating. This is why you should know at least the right pay stub template so you know what to expect. Any legal business should include this written statement with the employees’ paycheck. With it, it delivers good and fair atmosphere because of the honesty. Any mistrust issue can be avoided.
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The Included Information
If you see the pay stub template, you should see that it would be divided into sections and also information. Basically, a pay stub includes 3 major parts: the gross wages, deductions (including contributions and taxes), and net pay. Each of them will be divided into these sections:
- Gross wage is the employees’ pay starting point. It should include
- Hours worked, the amount of work that has been done. It should be divided into regular, double time, or overtime. Each of them will have its own line for better management
- Pay rate. If the employees are paid in hour, then it should include the hourly pay rate.
- Gross pay, which is the total wages (the pay rate times the hours worked) before the deduction is made.
- If there is additional earning such as holiday pay, personal time, bonuses, sick pay, or payroll advance, it should be included in this section.
- The deductions are the things that are included to ‘be taken from’ the gross wage. The deductions include:
- Tax deductions
- Benefits and other deductions, such as retirement plan or insurance premium, loan payment, and event charitable contribution
- Employer contribution, such as SUTA or FUTA tax
- Net pay is the number of total payment you receive after the gross wage is deducted with the deductions. Basically, the net pay is the amount of money you take home.
In the end, in the event that you have never got the pay stub, don’t hesitate to ask one from your employer. They are entitled to provide one for you. It won’t hurt to know the proper construction of the pay stub template either.