Comprehensive Guide to Create Pay Stubs Online
A pay stub is an invoice stating the amounts paid by an employer to an employee. It also includes the amounts deducted from a paycheck to pay taxes and contributions for retirement plans and health insurance. Pay stubs presents the amounts of current pay period and also indicates the year to date totals.
Pay stubs serve the purpose of income proof an employment proof when it is required. The document may come handy when taking a loan or going for debt refinancing. Employers are required to distribute regular pay stubs to all of its employees with each payment. Pay Stubly helps you to do all this and more.
Why Do Employers Need to Create pay Stubs?
The federal law requires company owners to preserve the records of their employees for two years after their job is over. The law does not make it mandatory to make pay stubs, but it is an easy way to stay on law’s side. The pay stubs can act as a record of all the information that authorities can ask anytime from you.
Another advantage of a proper pay stub is helping in cases of conflict. It serves as a ready proof of all the year to date payments and deductions. It can prove your honesty in cases of misunderstanding between you and the employee.
Pay stubs are required by employees for many purposes. Your pay stub will play the role of income and employment proof. It will be needed when your employees go for a new loan or want to refinance their existing home mortgage.
Rules about Tax and Cut Offs in a Pay Stub
An employer needs to The Items related to tax and other deductions are regulated by federal laws. Some of these deductions are mandatory by the law while others are not legally necessary. The following are the legal deductions you need to make to create pay stubs. You can also find the rules to create pay stubs online on federal websites.
Income tax, Social Security tax and Medicare tax have to be withheld from your employee’s paycheck. The Internal Revenue Service Circular E mentions the deduction requirements which are updated every year. The amount of federal income tax deduction is calculated based on the employee’s W-4 forms and the tax rates in Circular E. The items that come under this category are:
For the year 2016, an amount equaling 15% from the paycheck is withheld for incomes up to $ 45,282. It continues at 20.5% till $ 90,563. You need to deduct 26% for incomes up to $ 140,388. The rate becomes $200,000 from $ 140,389 to $ 200,000. For incomes over $ 200,000, the income tax rate is 33%.
Social Security Tax
The amount of $ 118,500 remains unchanged as the maximum amount of wages regarding Social Security tax. If the income is over this amount, you do not need to deduct it from the pay stub template. You have to deduct 6.2% from the paycheck of your employee to finance towards Social Security.
For high earning employees, Medicare tax forms a part of the pay stub deductions. The threshold for Medicare tax stands at an amount of $ 200,000 for 2016. As an employer you have to strike off 1.45% from the paycheck to contribute towards Medicare tax.
Deductions Required by State
The items to deduct from a pay stub under this includes state income tax, city and local taxes, state unemployment tax and disability insurance of state. The calculation of these items is different for each state and you need to be aware of the local regulations governing the pay stub deductions.
Wage garnishments are mandatory. You have to calculate the amount on the disposable income of the employee. It is the amount that is arrived after deduction of all the above mentioned items. This deduction cannot be more than the lesser of:
- 25% of the employee’s disposable income
- The amount of excess disposable income over 30 times of the minimum federal wage.
A state may have its own laws regarding wage garnishment. In that case you need to maintain the regulations stated by the state.
The items of wage garnishment may include
- Child support and alimony withholding order
- Garnishments related to creditors
- IRS and state tax levies
- Student loan garnishment
These deductions are initiated by the employer and accepted by the employee. The policies of federal and state governments influence the deductions though they are not mandatory by law. You must create a written policy and ask for the employee’s written permission to carry out these deductions.
- The items that comes under this category include
- Company sponsored benefits
- Health, accident, disability and life insurance
- Deductions made for paycheck advances
- Flexible spending accounts such as dependent care and health care
- Retirement planning
- Union dues
- Parking and transit costs
How to Create Pay Stubs Online?
You can create pay stubs online free but it may not be dependable. You can place your trust with Pay Stubly which is a simple pay stub generator. You can easily make a paycheck stub online and all you need to do is to fill up an online form on the site. All important items like legal company name, its address and contact number and even logo can be uploaded in the pay stub template. It also has a pay stub calculator to carry out calculations based on the rate. To create pay stubs online Canada residents can use Pay Stubly too.
You can even save your Pay Stubs online so that you can have it easy the next time. Pay Stubly ensures that the data is safe and you do not have to worry about expensive accountant fees, as the Pay Stubly software does it all for you. You can fill up the details about the employee including his name, Social Security and employee identification number needs to be mentioned in the online pay stub form. You can even fill in the rates and amounts, hours worked, overtime, vacation details and tax and other deductions in the respective fields. There are boxes to type in the current period amounts and the year to date amounts. Pay Stubly also offers you the option of previewing your pay stub before it generates pay stubs online.
Create Pay Stubs Online Canada: Generate Online Paystubs
As a small business owner and employer, you might find that you need to generate online paystubs. Canadian business owners may have a more challenging time finding free pay stub templates online. And it can be complicated to try and create your own on your computer using Microsoft Word or Quickbooks.
This article points out some Canadian pay stub generators online that can be useful. These are not costly payroll services, but for a fee they can provide a template to make pay stubs and calculate the taxes and wages for you online. You are even provided calculators for the federal tax, the provincial tax, and the Canadian Pension Plan (CPP). The data fields for wages, hours worked, and pay periods, are easy to find and fill out. Once you have completed the pay stub information, you can preview, view pay stubs online, and even add a logo.
After you pay a small fee, depending on how much access you want to their templates, you can save to a PDF file and print them out to give your employees and keep for your records. If you need to replace a pay stub, some services will provide you with one through a formal request and perhaps at a small cost.
There are websites and services out there that provide you with free printable pay stub templates. However, these do not offer the same benefits as a pay stub generator. And it is very rare to find one that is compatible with the taxes and financial needs for the Canadian employee. Hiring a payroll service can be expensive for a small business and not very cost effective.
So, using an online pay stub generator is a good choice. You can feel confident that you are providing your employees with what they need.
Make Pay Stubs Online Canada Business Owners
This simple guide will help Canadian small business owners how to save money on handling payroll. Without spending a fortune on payroll services as the big corporations do, you can provide your employees with custom made pay stubs. Using an online pay stub generator can, also, assist you in keeping track of your payroll.
The cost of using a pay stub generator is very inexpensive and you can use it as needed. The online templates contain on the required data fields to make proper pay subs. If you think that it may be difficult to find a template for Canadian business, think again. This article will show you that there are options for Canadian pay stubs.
Some online pay stub generators, like PayStubly.com, provide templates for Canadian employees. The online calculators for these ensure that the taxes required by the Canada Revenue Agency (CRA). Some items calculated and documented on the Canadian pay stub are as follows:
• Name and address of company
• Employee name and address
• Employee social security number
• Pay period
• Pay date
• Hours worked
• Gross and Net pay
• Year-to-date Gross and Net pay
• Federal Tax Deduction
• Provincial Tax Deduction
• Canadian Pension Plan (CPP)
• Year-to-date Deductions
Do you need to spend a fortune on payroll services as a small business owner? Why should you make pay stubs online Canada compatible? Some successful businesses pay a lot of money to a payroll service in order to avoid having to handle paychecks and pay stubs. Cracker Barrel provides pay stubs online by using a third party vendor allowing the company to provide paperless pay. Starbuck employees are able to access their pay stubs on the internet. These companies have the resources for a payroll service. What about the small business owner? Are the choices more limited for those in Canada?
Create Your Paystubs Online
Paystubly allows businesses to create their employee paystubs simply online.