The Importance of Pay Stubs for Every Company
Every company needs to provide its employees with pay stubs. Employees need this information to track records, get financial assistance or loans, and generally understand their finances. There are many important reasons why every business should be providing pay stubs to their employees. So, if you have a business and you are having a hard time making pay stubs yourself. It will help if you choose a user-friendly pay stub maker. Here is the importance of pay stubs for every company.
Allows You to Be Compliant With Federal Law
The Fair Labor Standards Act (FLSA) is a federal law that sets standards for employee wages and hours. One of the requirements of this law is that employers must provide employees with accurate information about their pay, including how much they have been paid and which deductions have been made. This information needs to be included in an official document called a pay stub.
Provides Employees With Helpful Financial Information
In addition to being aware of how much they have been paid, employees need to know what deductions were made from their paychecks. For example, some employers may choose to withhold taxes on a worker’s paycheck but pay the employer portion themselves out-of-pocket. This means that while the employee has received full payment for their work during a certain period, their paycheck may be less than what they expected.
Ensure Employee’s Taxes Are Filed Accurately
As mentioned above, employees need to know how much they have been paid and which deductions (if any) were made from this money. This information forms the basis of their tax records; it is necessary for filing accurate taxes throughout the year. Many small businesses do not necessarily keep track of employee work hours or pay rates; this is why we built our online tax software with the option for employees to enter their payment information. If your business still requires paper wage and hour records.
Provides Employees with Accurate Pension Information
Employees who are also members of a pension plan may need pay stubs in order to file accurate benefit claims. Some employers will provide an annual statement about the amount that was contributed on behalf of each employee. This does not replace the detailed information provided on regular payroll records. As always, be sure to check with your benefits department if you have any questions about what kind of information they require from employees.
To be a great company, you need to have pay stubs for every employee. Without them, it’s hard to track hours and even harder when having audits from the government or IRS. All employees must have access to their records to easily provide proof of income if needed at any time in the future. If your company doesn’t meet these requirements yet, contact us today about our services.
