What Should Your Pay Stub Format Look Like?

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Did you know that improper pay stub information can result in legal penalties that cut into your business's bottom line? Whether you're a startup that's hiring employees for the first time, or you've been paying your team for years, it's important to stay on top of payroll etiquette.
To help make sure your company's payroll doesn't cost you more money, here's a quick guide of all the information needed for a proper pay stub format.

1. Basic Information for Proper Pay Stub Format

To prepare your pay stub format, take a look at how a standard pay stub looks. First and foremost, you'll need to include the company name and address. Each employee pay stub will list their legal name and the last four digits of their social security number. Pay stubs also help employees and employers keep track of time by listing pay period start and end dates.

2. Wages and Income

Whether your employee is working hourly, by piece, or on a salary, a proper pay stub will list the rate at which they are paid. Furthermore, employees income is documented two ways by payroll. Net income is the actual amount of money that an employee will take home. On the other hand, gross income is the total amount paid to the employee before any taxes or other deductions are taken out.

3. Tax Deductions

Tax deductions are money withheld from an employee's gross income to be set aside for the government. Depending on where your business and employee are located, there may be federal, state, and local taxes withheld at each pay period.
A percentage is also withheld for Social Security and Medicare, which is listed as FICA on a pay stub. The current percentage withheld from employees for FICA is 7.65% of wages. As an employer, you'll also pay a share of this contribution, at the same rate.  

4. Other Deductions

Aside from taxes, there are other deductions that will be listed by a payroll company that's using proper pay stub format. These deductions can come from employer-sponsored health insurance plans, pension plans, or 401k or Roth IRAs. Deductions from income can also come from disability insurance or be a result of wage garnishments due to income tax penalties or debt.

5. Year to Date Details

In addition to net income and gross income for the specific pay period, proper format lists totals for the year so far. Be sure to include the employee's year to date gross income and net income on each pay stub. Additionally, you should track the year to date deductions from your employees' income for any of the appropriate categories that we listed above.  

You're All Set To Hire!

As you're preparing payroll for your employees, now you know what information you'll need to include to ensure the correct pay stub format. Still wondering about the best platform to do it? We've got your back, get started now with our paystub maker!


Frequently Asked Questions

Yes, there are many online resources, templates, and software available to help you create a pay stub. These tools can ensure you include all necessary information and maintain a consistent format.

You can choose the right pay stub format by ensuring it includes all necessary components and is easy to read. Consider using a template or software designed specifically for creating pay stubs.

Net pay is calculated by subtracting the total deductions and taxes from the employee's gross pay. This is the amount the employee actually receives in their paycheck.

A pay stub typically includes the employee's personal information, gross pay, deductions, taxes, and net pay.

Gross pay details should include the pay period, hourly rate or salary, hours worked, and total gross earnings. Any overtime, bonuses, or commissions should also be listed.

Deductions should include any pre-tax and post-tax deductions, such as retirement contributions, health insurance premiums, and garnishments. The individual amounts and a total deductions amount should be displayed.

A pay stub is a document that serves as proof of income, displaying an employee's earnings, deductions, and taxes for a specific pay period. It benefits both employers and employees by providing a clear record of all transactions related to payroll.

Personal information on a pay stub should include the employee's name, address, and Social Security number or employee identification number.

Tax information should include federal, state, and local income tax withheld, as well as Social Security and Medicare taxes. The individual amounts and a total taxes amount should be displayed.

Using the right pay stub format ensures that all necessary information is clearly displayed and easily understood by both employers and employees. This helps to prevent misunderstandings, disputes, and potential legal issues.
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What Should Your Pay Stub Format Look Like?
Samantha Clark

A Warrington College of Business graduate, Samantha handles all client relations with our top-tier partners. Read More

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