Paycheck stubs are important because of various reasons so it is quite interesting to notice the fact that most people have no idea what these actually are. When talking about a paycheck stub we refer to the paycheck part that the worker is going to retain after the paycheck is deposited.
Normally the information that is included in the pay stub is how much is paid, simple personal worker information that is really important for a payer and ongoing income computation for the entire year. Alternatively, some of such information is related to the time that a person worked for a specific company. The pay stub normally includes detailed information about deductions that are carried over towards insurance benefits, retirement plans, taxes and other facts of interest.
A paycheck normally represents payment that the employer will make to the employee. You basically have this working as a system that will keep checks on records. The employer and the employee can easily track the salaries and the benefits to be sure that they are going to be paid on time. In most cases we have pay stubs templates that are standard. However, information included and designs can vary from one employer to the next, although we have some common features.
What Is Included In The Pay Stub?
Employee name is always going to be included in the paycheck, together with social security number or a specific identifier that the employer offers. There is normally one unique number that is necessary so that the employee can be identified. This is needed for internal record keeping. Besides this, we have the employer address. Stubs specify the payment purpose, the time that is covered by the payment, can break up the specific amount into some items and much, much more. Paycheck stubs can also highlight how much money was sent by the employer for a specific time period.
Why Is The Pay Stub Important?
One of the most important things that have to be understood about the paycheck stub is that it is useful to keep employees informed about different tax deductions that were done. They are normally going to be separately reflected, like federal tax, health benefits, retirement plans and state taxes. At the same time, it does highlight deductions that were made for a week or for a month. That is vital as total deductions have to be kept into control. Employees are going to be informed about how much money was paid, deductions and records are kept about many different things of importance.
Holding On To The Pay Stubs
The pay stubs normally have to be kept for the yearly efile tax return filing. Employers do offer the final statement when the year is over but retaining individual payroll stubs are needed in order to be guaranteed that all amounts are 100% accurate. In many situations problems can appear. All the taxation experts will tell you to retain taxes paid records for around 7 years and the stubs from the past year.