Paystub maker is for one and all who want to calculate payroll for salaried employees or wages for contractors.
Some employees never pay heed to learn how their take-home pay is calculated & what deductions are made from their gross pay. However, the employer must have the essential details on hand of what goes ‘in’ and ‘out’ of the paycheck stubs. It’s essential to give instant answers if the employee asks for clarifications like:
- “What is my gross income?”
- “What amount is deducted as federal tax from my paycheck?”
- “How much will I get on hand?”
Take this as a piece of information as if you already use a pay stub generator, you have it all in front of your eyes. By entering a few basic details, everything is calculated in no time. The tax amount is deducted according to the state.
- Tally employees’ gross wages with the same in their agreements
Depending on the paystub’s format, the gross wages are displayed alongside the YTD deductions & Net Pay.
However, gross wages include tips, commissions, and overtime (if applicable). In a nutshell, it is the amount that an employee receives before any deductions & taxes are subtracted.
For contractors, no such deductions are applied as they work on hourly-basis. It is adjusted when they work overtime.
- Subtract Elective Pre-tax Withholdings
Some amounts are deducted from paychecks roughly referred to as pre-tax withholdings. These are also called as non-taxable wages. The deductions are made from the employee’s gross pay before income tax and other deductions are made.
Following benefits are included in pre-tax withholdings:
Health Insurance Premiums
Healthcare Deductions (like FSA)
Retirement Contributions (401(k) or 403(b))
- Subtract Employee-only Taxes
Not all tax amounts affect both – employee and employer. The following amounts are withheld and set aside at funds by employers and then remitted to the government on behalf of your team as a part of payroll:
- Federal Income Tax
- State Tax
- City & Local Taxes
Have a check on a local payroll expert to make sure that you don’t miss out on anything.
- Subtract Additional Taxes (to be paid by employer & employees)
As mentioned above, some tax amounts are to be bared by both – employers and employees. However, only the employee’s share will be reflected when you create pay stubs.
They are nothing but Social Security Tax and Medicare Tax.
- Subtract Voluntary & Involuntary Deductions
There are some paychecks deductions showing up on paystubs & also contribute to lowering the employee’s net pay. The following amounts are deducted additionally from employee’s final paychecks:
- Wage garnishments (court-ordered withholdings)
- After-tax paycheck deductions
- Add Reimbursements
With every deduction, paychecks get smaller but they can be balanced with reimbursements. Any expense made by the employee for the firm is included as reimbursed back in the paycheck. This will help you track your tax findings.
- The Paycheck is calculated!
The last step is the paycheck calculation. You can do it in minutes with a check stub generator. The greatest relief knows that you don’t have to make many efforts to calculate paychecks as an online pay stub calculator tool will do it efficiently.
You get your take-home pay displayed as net-pay on the paycheck stub. That’s all!
Would you use a free check stub template to make your easy-going stub making look professional?Tags: Calculate take-home pay, Check Stub Generator, Create pay stubs, free check stub template, pay stub generator, paystub maker