How to handle taxes on an employee pay stub?

Employees are essential to any business, but with the increase in automation and technology in recent years, it can be hard to keep track of all the payments your employees make. In this article, we’ll show you how to handle your employee pay stubs using software that makes the process much easier.

How to handle taxes on an employee pay stub?

When you receive your employee pay stubs in the mail, it’s important to take a few minutes to review the information included on the stub. You’ll need this information to fill out your taxes correctly.

What Is a Pay Stub? All Your Questions Answered

Image Source: Google

There are a few things to keep in mind when reviewing an employee pay stub:

1- The pay period covered by the stub will usually be listed at the top of the stub. This is the period during which wages were earned.

2- The wages shown on the stub will usually be gross wages, which include both direct and indirect wage expenses such as taxes.

3- The gross wage shown on the stub is not always what was actually paid out to the employee. Tax deductions may have been taken prior to calculating net wages on the pay stub.

4- You should also review any deductions that have been made from employees’ wages on the pay stub, such as federal and state income taxes, social security and Medicare taxes, and union dues. 

What to do with an employee pay stub?

1- Verify the information on the pay stub. Make sure that the wages and hours shown are accurate. If there are any mistakes, correct them immediately.

2- Calculate the payroll taxes based on the wages and hours shown on the pay stub. If there are any taxes due, add them to the employee’s total paycheque.

3- Deposit the employee’s pay cheque into their bank account or into their designated savings account.

4- Send a copy of the pay stub to the employee’s employer.