Did you know the Fair Labor Standards Act requires employers to keep accurate records of employees and their earnings? However, the act doesn’t require employers to provide their employees with physical paystubs.
For those companies who do supply their employees with paystubs, it doesn’t always go over without issues. As many as 82 million Americans have stated they’ve experienced one or more errors with their paychecks during their careers.
But why is a paystub important? What information do they need to include? Continue reading to learn the answers to these pressing questions.
Why Are Paystubs Important?
Paystubs are important because they’re a physical record of all work done. This isn’t only important for both the employee and employer. In some circumstances, it can be essential.
For example, if a person is being audited by the IRS or applying for state assistance. In either situation, a wage slip may be necessary as a form of documented proof. Without this proof, a person may suffer fines from the IRS in one situation or be denied assistance they need in the other.
What Should Be Included on a Paystub?
Certain things need to be included on a pay slip. These items include:
- Employee details, including name, social security number (or work identification number), and mailing address
- Employer’s name and mailing address
- Pay period dates (generally one week, but sometimes pay periods vary)
- Employee pay rate (which should be above minimum wage)
- Gross earnings (money made before anything was taken out)
- Employee contributions are taken out (which may include money placed towards retirement plans or pensions)
- Deductions are taken out (which may include taxes, health insurance, or life insurance costs)
- Net pay (take-home pay after all contributions and deductions)
Each of these items helps create a clear understanding of how a person is earning their money. Depending on what paystubs are used for, the gross pay or the net pay may be used. This is why a complete breakdown is necessary.
What Is Your Employer Doesn’t Offer Physical Paystubs?
If your employer doesn’t offer physical paystubs, there are alternatives. Sometimes digital paystubs are offered, which can be printed and used. If this isn’t an option, you can also use a paystub maker to create one for yourself.
If using a paystub generator, be sure you have all the information listed above on hand. If you don’t, it’s essential to ask your employer for this information.
More Questions About Information Necessary on a Paystub?
The Fair Labor Standards Act requires employers to keep accurate records of their employees and earnings but doesn’t require the use of paystubs. However, paystubs aren’t only convenient but often necessary. Due to this, alternative means of paystub creation are sometimes necessary.
Do you have more questions about the information a paystub should include?
Check out our other blogs. You’ll find articles on paystubs, business best practices, and similar topics to help you learn more on the subject.