Regardless of the business type and industry, company owners have a few common rules they must follow. These rules include calculating and filing taxes by the due date, protecting employee rights, offering decent salaries, and overall handling payroll. One of the subtasks of handling payroll is creating pay stubs.
Typically, bigger businesses have accountants or entire departments handling such tasks. But individuals who are only at the beginning of their entrepreneurial journeys don’t have the luxury of hiring accountants or even affording expensive accounting software to handle pay stubs. In that case, they may use convenient pay stub creator tools. Keep reading the article to learn more about pay stubs and generator tools that create these documents.
Understanding Pay Stubs
A pay stub, or check stub, is a document that contains information about the employee. It details employees’ gross income, deductions, and net income for the fiscal year. Depending on the company’s payroll schedule, this information may be delivered weekly, bimonthly, monthly, or semi-monthly. The data on the pay stub includes the following:
- the company name and address;
- the employee’s name and address;
- the salary;
- taxes, withholdings, premiums, etc.
This data differs from company to company and from employee to employee. For example, if a company has employees who work in dangerous environments or may be susceptible to injuries, the company withholds a small portion of the wage for employee compensation. Thus, it may appear on a pay stub.
In other cases, specific employees may be exempt from tax withholdings, such as when they have several children, dependents, etc. Moreover, if an employee is recently divorced and has a child to support, the employer might be responsible for withholding child support money from the employee’s paycheck.
Pay Stubs Vs. Paychecks
Many use pay stubs and paychecks as interchangeable terms. However, these are two different documents. A paycheck is a document that enables you to get your salary. You can visit a bank and ask to cash out the check. A pay stub simply shows how your employer calculates the salary.
Moreover, a pay stub may be a convenient document to prove income. If you’re considering applying for a loan or a mortgage, the bank will ask you to confirm your earnings. Some financial institutions don’t ask for such documents but offer inconvenient terms and rates. Thus, it’s best to use pay stubs to prove income source and size.
What Is A Pay Stub Creator?
So, what is a pay stub creator? It’s a software-based online tool that enables employers and self-employed individuals to create pay stubs. It’s a simple tool that requires users to create accounts and choose templates. Most services have at least a dozen various templates. Some platforms even allow clients to customize pay stub templates or create from scratch.
Once you create an account, the system asks you to add information to the template. In the future, the system will enable you to save general information about the company and your employees to save time. You have to fill out the following data to create a pay stub:
- General information (once after registration).
- Gross wage (employee income before withholdings).
- Deductions, withholdings, and other data for each employee.
- Net income.
Once you’ve added all the required data, you can review the document before creating it. Once all documents are ready, you will receive them for payment in your email box. Most generators are more affordable than accounting software. For instance, Real Check Stubs costs under $9, so it’s more convenient for businesses to use generator tools.
The Importance Of A Pay Stub Creator Service
Creating pay stubs may not be a federal requirement, but most companies still provide their employees with these documents. Most businesses use software, or pay stub creators, to generate these documents.
But why is this tool so important? Many employees worldwide use such programs to keep track of the hours they’ve worked and the cash they’ve earned. They also use it to keep track of their employees’ work hours and salaries.
It is an online tool for recording your working hours and the accompanying payment owed, regardless of whether you are self-employed or a business owner. This instrument goes a long way toward making administration and tax filing much easier for self-employed persons.
The generator saves time and cuts costs since some accounting software may be too expensive. A simple generator enables the business owner to look professional.
Advantages For Businesses To Use Pay Stub Creator Tools
Now that you understand the importance of a simple pay stub creator tool, here are a few more benefits that might convince you to use one:
- Create professional-looking pay stubs. A generator enables employers to choose one pay stub that looks professional and meets all state or local government requirements.
- Keep records in order. Once you create the first portion of pay stubs for your employees, you can save these documents for future reference. You can create folders for each employee to store their data and use to generate future pay stubs. Moreover, such an approach enables you to get rid of the unnecessary paper trail that only costs money and doesn’t offer any benefits.
- Save time and dedicate efforts to optimizing your business. Instead of spending time calculating withholdings and deductions, you can use a generator. Thus, you have more time to find new markets, expand business operations, track opportunities, and complete other important tasks.
- Ensure the scalability of your business. You may have a few employees today, but the situation may change in a year or two. Using a pay stub generator tool enables you to categorize data and organize a system. This system may be convenient in the future when you expand staff and optimize business operations.
Another advantage is affordability compared to buying a subscription for accounting software. Even though it’s recommended to use accounting software since it makes bookkeeping and accounting easier and more structured, not every business can afford one. Thus, it’s best to start by using a simple generator tool.