Now that you’ve hired your first set of employees, you’ll have to keep track of their payments, both for yourself and their sake. Create a pay stub template.
One of the most daunting tasks that any budding entrepreneur faces is the task of payroll. Not only is it a rather boring, mundane task, but it’s also fairly complicated!
One of the ways to make payroll much simpler is to start with a standardized pay stub template. With a rinse-and-reuse template, you’ll be able to slice through all of the pay stubs you need to create in no time at all.
If you don’t know where to get started with creating a pay stub template, then you’re in the right place. In this article, we’ll cover the basics of what your pay stub template needs.
Use The Right Tool
First things first: there’s no reason for you to have a paper-based payroll strategy in 2020. There are just too many good software tools out there that enable you to go paperless and use electronic pay stubs.
Thus, the first and most important step in creating a pay stub template is to choose the right pay stub creator software. We recommend thepaystubs.com for its ease of use and intuitive UI. It has all the functionality that you’ll need.
Pay Calculation
The first thing to include in your pay stub template is the pay calculation. How you calculate pay will depend on whether the employee is salaried or hourly.
If salaried, divide the yearly salary by the number of pay periods in a year. Add to that any commission or incentive-based payment schemes that they earned over the course of the pay period.
If hourly, list the number of hours worked by the employee, both regular as well as overtime. Then, list the hourly rate. Multiply the number of regular hours by the hourly rate and then multiply the number of overtime hours by the hourly rate and then again by 1.5. Sum those two products to get final pay.
Include Withholdings
The next thing to have in your pay stub template is withholdings. The last thing you want to do as a budding business is to get on the wrong side of the IRS. You need to ensure that you are taking out the appropriate amount for both federal and state taxes from your employees’ income statements.
You will calculate withholdings based on the deductions listed in an employee’s W-2. You should collect this form from all employees during the onboarding process.
Include Contact Info
Last but not least, include your contact info as well as the employee’s contact info. This is a mandatory inclusion for pay stubs and will make the income statement look far more professional as well.
How to Make a Pay Stub Template
There you have it — with this guide on how to craft your very own pay stub template, you’re well on your way towards slicing the amount of time you spend on payroll in half.
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