When you receive your paycheck, you should also receive a direct deposit pay stub that details everything that went into — and out of — your pay for the period. A pay stub usually shows the number of hours worked, deductions from your paycheck, and other elements that influence your income. Below, we will introduce you to the basic information about a pay stub, explain what details it includes, and answer commonly asked questions about it in this post.
What is a pay stub?
A pay stub is the section of a paycheck that specifies the earnings earned during the pay period. It is also known as a paycheck stub or a pay slip. If a corporation pays its employees in cash, the pay stub is usually included with or connected to the paycheck.
Workers who get their paychecks via direct deposit will usually see their pay stubs through an online portal.
Is a pay stub the same thing as a paycheck?
No, a pay stub and a paycheck are not the same things. A pay stub is a component of a paycheck that itemizes an employee’s salary and shows the taxes and deductions that have been deducted. It also shows the net remuneration received by the employee. The pay stub is occasionally given separately from the paycheck itself.
What information is on a pay stub?
The content of a pay stub may vary somewhat depending on the demands of the sector and state employment laws. Pay stubs often contain the following items:
Employee information, including name, address, and Social Security number.
Employer information, such as the name and address of the company.
Net wages are the funds received by an employee after all taxes and deductions have been removed from their salary.
Employees’ gross wages are their earnings before deductions and taxes are subtracted.
The number of hours an employee worked during a pay period.
The dates of the pay period.
The employee’s salary range.
Deductions for things like life and health insurance.
Employee contributions to pensions or retirement plans.
Federal, state, and local taxes that are withheld.
Workers who are paid by the hour should have their pay stubs indicate both their hourly rate and the number of hours worked. If the employee is paid on a salary, the normal number of hours per week is around 40.
If the employee is paid on an hourly basis and is eligible for overtime compensation, the pay stub should include this, as well as whether or not they worked any overtime hours. It should also include any incentives that the employee earned as part of their gross salary. Businesses must also identify whether an employee utilized sick leave or paid time off during the pay period in many areas.
What is the purpose of pay stubs?
A pay stub provides critical information for the employer as well as the individual. Employers may use them to settle wage disparities. During tax season, they can also use them to prepare an employee’s W-2 form. Employees may review their pay stubs to ensure they were paid accurately, confirm the amount withheld for retirement or healthcare expenses, and comprehend any additional deductions.