Just remember to keep your login information safe and secure, as electronic paystubs are often protected for your security. FICA is a payroll tax paid by both employees and employers to fund Social Security and Medicare. These are federal programs providing benefits for retirees, people with disabilities, and children of deceased workers. The FICA law requires employers to withhold 6.2% Social Security tax, 1.45% Medicare tax, and 0.9% Medicare surtax when an employee earns more than $200,000. There’s no federal law that mandates companies have to provide their workers with a check stub. However, many states have laws that require some form of written pay statement.
Are employers required to provide pay stubs?
In this article, we’ll explore the anatomy of a check stub, including employer and employee details, gross wages, taxes and deductions, back pay, and net income. According to the IRS, you are required to keep your salary pay stubs for a minimum of four years. Besides this institution, there are also a few other laws that require you to keep these documents for a specific amount https://kamichichi.com/understanding-forensic-accounting-definition-uses/ of time.
- It is, therefore, an offence punishable by law, and a person may be fined, sued, or jailed depending on the gravity of the offence.
- A payslip typically refers to the same document as a paycheck stub but is usually a more informal term.
- A pay stub is a document that shows an employee’s payment details, such as earnings, deductions, and how much they take home.
- It’s also about giving them visibility into how their pay is calculated, which is where pay stubs — also known as pay statements or paycheck stubs — come in.
- To calculate the gross earnings, you need to specify their regular rates and the total hours worked for the completed pay period.
- From gross wages to deductions and taxes, it’s your key to financial clarity.
Fill in the Details
However, it is important to comprehend each section of a paystub, even if you’re using such tools. Pay stubs serve as essential documentation to resolve payroll discrepancies. Some examples include incorrect recording of hours worked or miscalculated deductions by your employer. At Check Stub Maker, we’re experts in money matters and can help you decipher your check stubs seamlessly with our user-friendly paystub maker.
How does a Paycheck work?
Sally’s net pay is $2,308, less a total of $577 for taxes,and $50 for her health insurance premiums. Unemployment programs are funded by the FUTA tax (federal)and the SUTA tax (state). These amounts are paid by the employer, but alsoreported on the pay stub. Employers also pay 7.65%, and the cost is deducted as a business expense. For employees, the most important function of paystubs what is a check stub is record keeping.
Is FICA Mandatory?
Here, employers need to specify the date when Bookkeeping for Etsy Sellers they issued the pay stub as well as the employee’s pay date. The pay date typically coincides with the date when the most recent pay period was completed. Now that you know what a pay stub is, let’s briefly discuss its different uses to help you understand better why these documents are integral to every business and its employees.
