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Paycheck

Form 1099-NEC or nonemployee compensation 1099 makes a comeback in 2020 after a 38-year hiatus.
Employers and business owners used Form 1099-MISC for the past few decades to report nonemployee compensation. This time around, they could now welcome the revived and revamped 1099-NEC form.
&nbsp;
This article gives you knowledge about the IRS requirements for non-employee compensation with your business.
<h2>What is 1099-NEC?</h2>
For starters, 1099 forms are federal income tax forms for businesses used to report financial transactions over the course of a tax year. Meanwhile, NEC stands for nonemployee compensation. This means Form 1099-NEC allows employers to report payments made to nonemployees or independent contractors.
&nbsp;
Specifically, you use the form to report someone's earnings that do not include wages, salary, or tips (which you report on a Form W-2 meant for employees). The 1099 forms were allocated for independent contractors.
&nbsp;
Non-employee compensation 1099 typically reports fees, commissions, prizes, and awards to nonemployees $600 or more. Employers need to file 1099-NEC with the Internal Revenue Service (IRS) and send copies to all recipients by January 31, generally.
&nbsp;
Form 1099-NEC also reports any federal income tax withheld under the backup withholding rules.
<h2>Is This A New Form?</h2>
Answering the question "Is the nonemployee compensation 1099 form a new form?" requires us to take a little history lesson. The 1099-NEC dates back to 1982, when it was last used. This makes it an old form, but the IRS brought it back to use in 2020 to simplify payment reports to nonemployees.
&nbsp;
Therefore, the answer to the question is both a yes and a no. After the IRS discontinued 1099-NEC in 1982, Form 1099-MISC became the main form where employers need to report non-employee compensations. However, due to the tax law Protecting Americans from Tax Hikes <a href="https://www.finance.senate.gov/imo/storage/posts/doc/Summary%20of%20the%20Protecting%20Americans%20from%20Tax%20Hikes%20PATH%20Act%20of%202015.pdf" target="_blank" rel="noopener">(PATH) Act </a>that aims to protect taxpayers against fraud, the 1099-MISC became an ineffective document.
&nbsp;
The PATH Act made different sections of the form due at different times, making it a troublesome means of reporting. Box 7 on the miscellaneous form became due by January 31, while the rest of the form became due by February 28 for paper filing and March 31 for electronics filing.
&nbsp;
In the revived 1099-NEC form, the amount reported in Box 7 (nonemployee compensation) would go in Box 1. Bringing back the old, discontinued nonemployee compensation 1099 became the best solution to create a better process. This eliminated errors when submitting two 1099-MISC forms at different times. Employers would only have to use one form or the other.
&nbsp;
<img src="https://www.realcheckstubs.com/storage/posts/form 1099-nec paystub creator.png" alt="Is the nonemployee compensation 1099 form a new form" width="958" height="426" />
<h2>Which Form Should You Select? / Do I Need To File A 1099-NEC?</h2>
If you pay a nonemployee, such as independent contractor, on behalf of their business, at least $600 for services, goods, or even legal fees, then you would need to file a 1099-NEC. This amount could include fees, commissions, bonuses, and even benefits.
&nbsp;
You should file a nonemployee compensation 1099 form for each individual paid $600 or more during the year if:
&nbsp;
<ul>
<li>- An employer pays an individual not in their employ, such as an independent contractor, for services performed. This could include materials utilized to perform the services or payments for parts; or</li>
<li>- A business owner purchases fish or other aquatic life using cash payments from anyone engaged in the business or trade of catching fish; or</li>
<li>- An individual makes a payment to an attorney for their legal services in the course of a trade or business.</li>
</ul>
Typically, you would need to report a payment as nonemployee compensation if it meets all the following conditions:
&nbsp;
<ul>
<li>- You make a payment to an individual not employed in your company or business.</li>
<li>- The payment covers services in the course of your trade or business.</li>
<li>- You make the payment to an individual, partnership, estate, or corporation.</li>
<li>- The payee receives payment of at least $600 during the year.</li>
</ul>
&nbsp;
If you withheld any federal income tax (regardless of the total amount paid out) as part of the backup withholding rules, or make a payment of at least $10 in royalties, then you would still need to file a 1099-NEC.
<h2>Who Requires a Form 1099-NEC?</h2>
If a business owner paid an independent contractor $600 or more during a tax year, they need to file Form 1099-NEC. However, a nonemployee compensation 1099 form would not be required if the contractor were registered as an S corporation or C corporation, which can be determined on the contractor's Form W-9.
&nbsp;
You do not need to file a 1099-NEC for their employees. Employees are required to file a Form W-2 to report their wages, tips, and other compensation earned during a tax year. You could find yourself with significant penalties if you misclassify employees as contractors.
&nbsp;
If a business owner pays an LLC or an individual $600 or more during the tax year in rent, legal settlements, awards, or prize winnings, they need to file a 1099-MISC.
<h2>Where Do You Send Form 1099-NEC</h2>
When filing Form 1099-NEC, you should be aware of where to file them. Like the Form 1099-MISC, employers need to file multiple copies of the nonemployee compensation 1099.
&nbsp;
Each Form 1099-NEC requires two copies, Copy A and Copy B, which need to be filled out with the same information. If an employer hires an independent contractor and pays $600 or more in a year, they must report all payments in that year.
&nbsp;
Copy A would go to the IRS, Copy 1 to the state tax department (if applicable), Copy B and Copy 2 goes to the contractor, while Copy C should be stored for record-keeping purposes. The independent contractor receiving Copy B does not have the responsibility to file Form 1099-NEC.&nbsp;
&nbsp;
You could also file Form 1099-NEC electronically or through mail to the IRS, depending on which state your business mainly operates.
&nbsp;
In some places, employers are also required to file nonemployee compensation 1099 with the state. Alaska, Florida, Illinois, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington, and Wyoming do not require employers to submit 1099 forms.
<h2>What Do You Include on Form 1099-NEC?</h2>
Employers should request a filled-out Form W-9 from newly hired independent contractors to fill out Form 1099-NEC. When filling out Form 1099-NEC, you should include the following information.
&nbsp;
<ul>
<li>- Your name, address, and phone number</li>
<li>- Your TIN (Taxpayer Identification Number)</li>
<li>- Recipient's name, address, and TIN</li>
<li>- Total nonemployee compensation</li>
<li>- Federal and state income tax withheld (if applicable)</li>
</ul>
&nbsp;
Additionally, Form W-9 should include the contractors:
&nbsp;
<ul>
<li>- Legal name or business name if applicable</li>
<li>- A business entity (sole proprietor, partnership, corporation)</li>
<li>- Current address</li>
<li>- Taxpayer identification number (SSN, ITIN, or EIN)</li>
</ul>
&nbsp;
Nice to Know: <a href="https://www.realcheckstubs.com/blog/paystubs/where-to-find-fein-number-on-pay-stub">&nbsp;Find EIN Number on Pay Stub</a> and<a href="https://www.realcheckstubs.com/blog/paystubs/do-pay-stubs-have-ssn-a-definitive-guide">&nbsp;A Definitive Guide to SSN&nbsp;</a>
The responsibility of filing nonemployee compensation 1099 falls on the payer. Check bookkeeping records to confirm the total amount of payments made to each contractor over a tax year and finish filling out the form.
&nbsp;
There are seven unnumbered boxes on the left side of the 1099 form. These boxes require you to input information about you as the payer and recipient (the contractor you paid during the year). There are also seven numbered boxes on the right where you enter amounts.
&nbsp;
<ul>
<li>Box 1: Nonemployee Compensation &ndash; You need to report all payments you gave to a nonemployee during a year. An independent contractor uses the amount entered in Box 1 to file their income tax return.</li>
<li>Box 2: Direct Sales &ndash; Box 2 is simply a checkbox for if you made any direct sales of $5,000 or more of consumer products for resale, buy-sell, deposit-commission, or any other basis. If you did make a direct sale, put an "X" in the checkbox.</li>
<li>Box 3: (Empty) &ndash; According to the IRS, Box 3 is reserved for future use and is currently left empty.</li>
<li>Box 4: Withheld Federal Income Tax &ndash; If you withheld taxes from nonemployee compensations under backup withholding, you would need to fill out this box with the amount withheld.</li>
<li>Box 5: State Tax Withheld &ndash; If you withhold state income taxes from a contractor's payments, you need to report the amount in Box 5.</li>
<li>Box 6: State/Payer's State No. &ndash; Enter the abbreviated name of the state and the state identification number where you withheld the state tax.</li>
<li>Box 7: State Income &ndash; Enter the amount of the state income in Box 7 of the nonemployee compensation 1099.</li>
</ul>
&nbsp;
You do not need to fill out Boxes 5 to 7 on the copy you send to the IRS, as these boxes are for the recipient and state only.
&nbsp;
<img src="https://www.realcheckstubs.com/storage/posts/nonemployee compensation form real check stubs.jpeg" alt="seven unnumbered boxes on the left side of the 1099 form" width="960" height="640" />
<h2>When is the Form 1099-NEC Deadline?</h2>
Although the miscellaneous 1099 form or 1099-MISC is still in use, contractor payments made by employers in 2020 and the succeeding years would need to be reported on the Form 1099-NEC. Starting 2021, the new nonemployee compensation due date is on January 31. However, if it falls on a weekend, the due date moves to the next business day.
&nbsp;
If January 31 lands on a Saturday or Sunday, which means the new nonemployee compensation 1099 form moves to the following Monday on February 1 or 2.
&nbsp;
Meanwhile, 1099-MISC is still due on March 1 if filing by paper or March 31 if filed electronically. If these dates do not land on business days, their due dates also move to the next business day.
&nbsp;
If you need to ask for an extension, there is no guarantee that you would receive it. Employers are still expected to submit 1099-NEC following the deadline unless prevented by a natural disaster, a severe injury, or by death.
<h2>Conclusion</h2>
It is always good to study these kinds of forms for the benefit of your business.
&nbsp;
The confusion brought about by the 1099-MISC form prompted the IRS to revive and reintroduce the revamped Form 1099-NEC, also known as nonemployee compensation 1099. Although the miscellaneous form is still in use by businesses, independent contractor payments made by employers are now reported on Form 1099-NEC.
&nbsp;
Using the 1099-NEC allows business owners to report nonemployee compensation without the trouble of filing on different dates. The form makes it easier and less complicated to file. Take a few minutes to get to know Form 1099-NEC and its requirements so your business functions smoothly without fear of penalties.

For starters, 1099 forms are federal income tax forms for businesses used to report financial transactions over the course of a tax year. Meanwhile, NEC stands for nonemployee compensation. This means Form 1099-NEC allows employers to report payments made to nonemployees or independent contractors.

What is 1099-NEC?

If you pay a nonemployee, such as an independent contractor, on behalf of their business, at least $600 for services, goods, or even legal fees, then you would need to file a 1099-NEC. This amount could include fees, commissions, bonuses, and even benefits.

Which Form Should You Select? / Do I Need To File A 1099-NEC?

If a business owner paid an independent contractor $600 or more during a tax year, they need to file Form 1099-NEC. However, a nonemployee compensation 1099 form would not be required if the contractor were registered as an S corporation or C corporation, which can be determined on the contractor's Form W-9.

Who Requires a Form 1099-NEC?

The nonemployee compensation 1099 form or 1099-NEC allows employers to report payments amounting to $600 or more to nonemployees. Who needs to file?

Guide to Form 1099-NEC:  Nonemployee Compensation

What is Form 1099-NEC and Who Needs to File?

One factor that every small business owner should not overlook and treat as important as others is the wage and tax statement form, also known as the W-2 form. Each year by January 31, employers must send to employees these forms to file their income tax returns. W-2 tax forms demand attention when filing. Failure to submit on time and improperly entered information could lead to fines. This article tackles everything you need to know when filing a W-2 form.<h2>What is Form W-2?</h2>Form W-2, also known as the Wage and Tax Statement, is an Internal Revenue Service (IRS) tax form used by employers to report wages paid to their employees and the taxes withheld from them at the end of the year. As part of their responsibilities, <a href="https://www.realcheckstubs.com/blog/w-2-form/ultimate-guide-to-w-2-form" target="_blank">employers must complete a Form W-2</a> for every employee in their company who receives a salary, wage, or other compensation. The W-2 tax form includes salary and wage information for employees as well as withheld taxes such as federal, state, and other taxes. Employees use this information to complete their tax returns when filling up Form 1040. <a href="https://www.irs.gov/forms-pubs/about-form-w-2" target="_blank">The IRS requires</a> employers to mail out the W-2 tax form on or before January 31. This allows taxpayers to prepare their tax returns before the income tax due date on April 15. This means an allowance of around two months for preparation. The withholding amount entered into the W-2 form is deducted from a W-2 employee’s tax return for a tax year. The IRS could also issue refunds if an employer withholds more income than necessary. Employers also use the wage and tax statement form to <a href="https://www.realcheckstubs.com/blog/paystubs/what-is-fica-on-my-paystub" target="_blank">report FICA taxes</a> to the Social Security Administration. Along with Form W-3, the employer files the W-2 form by the end of February with the Social Security Administration (SSA), which then reports to the IRS. The SSA uses the information on the form to calculate the Social Security benefits entitled to each worker. The IRS also uses the tax form to monitor an employee’s tax liability. This makes it a formal proof of income for the SSA, court proceedings, and applications for federal financial aid for college. <img src="https://www.realcheckstubs.com/storage/posts/w2 tax form check stub maker.jpeg" alt="What is Form W-2?" title="What is Form W-2?"> <h2>Who Files Form W-2s?</h2>As an employer who employs people in your business or company, you most likely would file the wage and tax form known commonly as the W-2 form. It is your responsibility to file and give each person receiving a salary, wage, or other compensation from you. However, this does not include independent contractors or self-employed workers, who need to use Form 1099 to report income statements. According to the IRS, you need to give a W-2 form to any employee who earns more than $600, including non-cash payments. You would need to file the W-2 tax form before January 31 each year so that your employees have enough time to file their income taxes before the deadline. To file for a wage and tax statement form, you would have to account for everything you paid to an employee, whether part-time, hourly, or salaried, or even if he or she worked for a short time. The form is still required even if the W-2 employee only worked for a day but earned $600 or more. The wage and tax form also requires you to account for any Medicare, Social Security, and taxes withheld from an employee’s paycheck. Additionally, if you pay a family member working under your business or company and make $600 or more, you would need to submit a Form W-2.<a href="https://www.realcheckstubs.com/blog/w-2-form/legal-benefits-of-w-2-form-for-employees">Discover Legal Benefits Of W-2 Form For Both Employers &amp; Employees</a> <h2>How To Complete The Lettered Boxes in W-2 Form?</h2>When looking at a W-2 form, you would see both lettered and numbered boxes that you, as an employer, must fill out correctly and adequately. <h3>Boxes A Through F</h3> The lettered boxes on a wage and tax form include the employer and employee’s basic information. A. Employee’s Social Security NumberB.<a href="https://www.realcheckstubs.com/blog/paystubs/employee-id-number-on-check-stub" target="_blank"> Employer’s Identification Number (EIN)</a>C. Employer’s Legal AddressD. Control Number (if applicable/not required)E. Employee’s Name appearing on their Social Security Number (SSN) cardF. Employee’s Address <h3>Numbered Boxes 1 Through 10</h3> <ul><ol><li>Box 1 shows the employee’s total taxable income, including salary, wages, tips, and bonuses in the tax form (if any).</li><li>Box 2 details how much federal income tax is withheld from a W-2 employee’s paycheck.</li><li>Box 3 shows the total earnings subject to Social Security Tax.</li><li>Box 4 shows the total amount of Social Security tax the employer withholds for the year.</li><li>Box 5 describes how much of the worker’s pay is subject to Medicare tax.</li><li>Box 6 details the amount of Medicare tax withheld for the year.</li><li>Box 7 shows the amount of tips a W-2 employee reports to their employer.</li><li>Box 8 shows how much tip an employer allocated for their employee.</li><li>Box 9 is for the 16-digit verification code needed to be entered when filing electronically. However, it reflects a now-defunct tax benefit, so not entering the code would not become a problem.</li><li>Box 10 reports the total amount an employer pays to an employee towards dependent care benefits (if applicable).</li></ol></ul> <h3>Numbered Boxes 11 through 14</h3> <ol start="11"><li>Box 11 shows the amount of deferred compensation an employee receives from an employer through a Non-Qualified (Taxable) Deferred Compensation Program.</li><li>Box 12 details all other types of compensation or reduction that have not been included but need to be included from an employee’s taxable income. Each amount corresponds to one of 31 different codes (A through FF), which include, for example, payments to a 401(k) plan.</li><li>Box 13 of the tax statement form contains three sub boxes an employer chooses to report payments not subject to federal income tax withholding. The first option includes a statutory employee or independent contractor considered as an employee for tax withholding purposes. The second sub box shows if the employee participates in an employer-sponsored retirement plan. Lastly, the third option shows if an employee receives sick pay under an insurance policy.</li><li>Box 14 has the same function as box 12, allowing an employer to report other tax-related information that might not fit into other sections of the W-2 tax form. This includes union dues and state disability insurance taxes, among others.</li></ol> <h3>Numbered Boxes 15 Through 20</h3> The last six boxes on the wage and tax form report information related to applicable state and local taxes. They include the amount of an employee’s pay subject to such taxes and the amount withheld from the paycheck. <ol start="15"><li>Box 15 shows an employer’s state tax ID number and the state where the business mainly operates.</li><li>Box 16 details the amount of an employee’s taxable state wages.</li><li>Box 17 shows how much state wages an employer already withheld for the year.</li><li>Box 18 shows applicable local taxes.</li><li>Box 19 details how much local tax an employer already withheld for the year.</li><li>Box 20 provides the name of the locality where the employer withholds the taxes reported above.</li></ol><img src="https://www.realcheckstubs.com/storage/posts/w2 tax statement wages.jpeg" alt="How to fill w-2 form?" title="How to fill w-2 form?"> <h2>Filing Requirements</h2>As discussed earlier, employers need to complete and file the W-2 form and mail them to their employees by January 31 of each year. Employers filing the wage and tax form electronically to the Social Security Administration also have until the same deadline. The form requires employers to make six copies: Copy A – The employer completes this copy using red ink, making it the most distinct, and files it, along with W-3, to the Social Security Administration. Form W-3, which the employer must sign, summarizes all accomplished W-2 forms. Copy B – Copy B reports federal income taxes, which the employer sends to the employee, who then files with their individual tax returns. Copy C – The W-2 employee receives Copy C for purposes of record keeping. Copy D – The employer retains Copy D for purposes of record keeping. Copy 1 – Copy 1 goes to the applicable local governing body with the employer’s state or local income tax returns (if any). Copy 2 – Copy 2 also goes to the applicable local governing body, but with the employee’s state or local income tax returns (if any). The IRS requires employers to send W-2 tax form copies B, C, 1, and 2 to their employees by January 31 of the year, immediately succeeding the year which the W-2 form reflects. This gives W-2 employees approximately two months to prepare their income tax statement form due on April 15. Along with W-3, the employer must file the wage and tax form with the Social Security Administration by the end of February.<h2>Importance of Tax Withholding</h2>As the employer, you withhold amounts from your employees’ paychecks for federal income taxes. Those amounts are then reported and remitted to the Internal Revenue Service (IRS) throughout the year using the W-2 form. The IRS requires everyone to file an income tax statement form and make periodic payments in a year. For W-2 employees, when preparing federal returns and calculating the tax for the year, subtract from your tax bill the withheld amounts reported on the W-2 tax form. After doing so, you would know whether you would need to make an additional tax payment or receive a refund. This is also the case when filing state income returns. Perform the same calculations for the amount withheld to pay state income taxes.<h2>Verifying Name and Social Security Number</h2>The W-2 tax form’s identifying section essentially functions as a tracking feature. If the employee’s income reported on their taxes does not match the information provided in their W-2 form, the IRS would want to know why. The IRS would match the employer’s corporate tax return with the reported payment amounts to account for accuracy. Additionally, since the IRS receives a copy of each employee’s wage and tax statement form, it knows whether an employee owes tax. The agency could also contact the W-2 employee if they fail to file for a tax return. The employer should check to see if the worker’s name and Social Security number are accurate.<h2>Penalties for Late Filing of W-2 Form for Small Businesses</h2>Late submissions of W-2 forms or wrong information reported means penalties for employers. That is why they need to <a href="https://www.realcheckstubs.com/blog/w-2-form/ultimate-guide-to-w-2-form" target="_blank">file W-2s to the SSA and send them to their employees before the deadline</a>. The penalties could range depending on how late an employer submits the W-2 tax forms. If an employer fails to file a W-2 employee’s wage and tax form on time, the IRS could impose a penalty of $50 per W-2 if the employer files the correct form within 30 days of the deadline. The maximum penalty is $187,500 for small businesses. If the employer files between 31 days of the due date and August 1, the penalty increases to $110 per form with a maximum of $536,000. Failure to file tax statement forms on or after August 1 incurs a fine of $270 per return or a maximum of $1,072,500 a year for small businesses. Lastly, intentionally neglecting to file comes with a $550 penalty per form with no limitation depending on the infraction. The Internal Revenue Service considers a business a small business if it earns an average of $5 million or less in annual revenue for the past three tax years.<h2>Extension for Filing W-2 Forms</h2>Using the Application for Extension of Time to File Information Returns, also known as Form 8809, employers could ask for a 30-day extension for filing W-2 forms from the IRS. This gives employers a chance to catch up if they think they would miss the deadline. However, the IRS does not automatically grant extensions unless in “extraordinary circumstances or catastrophe.” For example, suppose a business experienced a natural disaster such as a hurricane, tornado, or flood, or your records and books became a victim of fire. In that case, the employer could receive a favorable response on their extension request for filing the wage and tax statement forms. Form 8809 should contain a detailed explanation of the reason for the extension, and the employer should sign it under penalty of perjury. The best time to file Form 8809 is between the 1st and 31st day of January or as early as possible.<h2>Conclusion</h2>Filing W-2 forms on time and correctly is an integral part of any small business. <a href="https://www.realcheckstubs.com/generateStubs" target="_blank">Take the time to create a check stub</a> and have all essential information recorded properly each time you pay an employee. Understanding everything there is to know about W-2s would give you the advantage and eliminate problems in the future. A growing business comes with proper reporting of wage and tax statements.

Form W-2, also known as the Wage and Tax Statement, is an Internal Revenue Service (IRS) tax form used by employers to report wages paid to their employees and the taxes withheld from them at the end of the year. As part of their responsibilities, employers must complete a Form W-2 for every employee in their company who receives a salary, wage, or other compensation.

What is Form W-2?

As an employer who employs people in your business or company, you most likely would file the wage and tax form known commonly as the W-2 form. It is your responsibility to file and give each person receiving a salary, wage, or other compensation from you. However, this does not include independent contractors or self-employed workers, who need to use Form 1099 to report income statements.

Who Files Form W-2s?

The penalties could range depending on how late an employer submits the W-2 tax forms. If an employer fails to file a W-2 employee’s wage and tax form on time, the IRS could impose a penalty of $50 per W-2 if the employer files the correct form within 30 days of the deadline. The maximum penalty is $187,500 for small businesses. If the employer files between 31 days of the due date and August 1, the penalty increases to $110 per form with a maximum of $536,000.

What Are Penalties for Late Filing of W-2 Form for Small Businesses?

Dig into the details and requirements of a W2 for your small business. Learn the ins and outs of W-2 forms and ensure accuracy for both you and your employees.

Mastering W-2 Forms: A Step-by-Step Guide for Employers

W-2 Wage and Tax Statement Form For Small Business

Finding the right and trustworthy real check stub maker is an essential element of processing or running payroll for your employees. For small businesses without a partner payroll processing company, you might find yourself doing payroll manually. This includes accurately calculating employee hours and pay, providing employee and employer identification numbers, and understanding federal and state laws.
&nbsp;
<a href="https://www.realcheckstubs.com/blog/paystubs/what-is-a-paystub-and-what-does-a-paystub-look-like" target="_blank" rel="noopener">Paycheck stubs provide crucial information to your employees</a>, allowing them to track their finances, such as contributions and taxes paid and gross and net income. These documents also help you keep payroll records.
&nbsp;
Generating paystubs could become laborious and time-consuming, especially when you employ many workers. Luckily, various online real check stub generators could help you throughout the whole process. As they are a necessary part of payroll, you need to develop a system that would quickly generate paystubs.
&nbsp;
Searching for a paystub generator on the internet would spit out many options, both free and paid versions. These online services offer excellent services that would benefit your business in dealing with administrative tasks. However, as great as that sounds, you should still make sure that their services could be trusted.
<h2>7 Safety Features to Look For in an Online Real Check Stubs Maker</h2>
A good check stub maker has qualities that guarantee a safe and worthwhile experience that helps businesses run a smooth payroll. Here are some features you need to consider before trusting an <a href="https://www.realcheckstubs.com/blog/paystubs/best-paystub-generator-2022" target="_blank" rel="noopener">online paystub generator</a>.
<h3>1. Secure Payment</h3>
One of the most sought features when looking for a trustworthy paystub generator is a secure payment channel. A quality service provider would ensure the safety of your payments by protecting your sensitive bank or card information. It would be best if you always looked for a trusted gateway when transferring funds online.
<h3>2. Secure Data Transmission</h3>
Using an online check stub maker means you would need to share personal employee and company information, such as wages and identification numbers. Look for a reliable generator that guarantees the data you share with their server would be encrypted. This eliminates the risk of any data breach that hackers could take advantage of. Check for data encryption that goes through Secure Sockets Layer/Transport Layer Security (SSL/TLS).
<h3>3. Data Security Against a Third Party</h3>
Make sure to always read the terms and conditions of the service provider thoroughly. Understanding how check stub generators collect and use the data you provide gives you an added layer of protection from unwanted actions. Third parties could use personal information for various commercial purposes, such as targeted advertisements. Confirm that if any data is gathered, it would only be used to customize and ease your service experience and not leak to other parties.
<h3>4. Customer Reviews&nbsp;</h3>
Going through both positive and even negative reviews could help you decide whether to trust a check stub generator. Reviews show the experiences of different people while using the on-site&rsquo;s services and features. Look for customer statements that examine the paystub maker&rsquo;s performance, service quality, overall security, and customer relations. <a href="https://www.realcheckstubs.com/reviews" target="_blank" rel="noopener">You can check customer reviews about the Real Check Stubs generator.</a>
<h3>5. Quality Customer Service</h3>
A promising sign of excellent customer service means that your queries are guaranteed to be answered and resolved within 24 hours of posting. This also comes hand-in-hand with security as hands-on service requires a service representative to help you if you have trouble using their platform or need to make corrections. Find out whether they could be reached via email or phone.
<h3>6. Transparency in Return and Refund Policy</h3>
There could be circumstances where a mistake could be made while entering information or ordering a check stub. You might also be dissatisfied with their service or have issues with the final printable paystubs wishing to discontinue. Look for a check stub generator that has accountability when it comes to returns and refunds when necessary. Some service providers offer 24-hour corrections or a 100 percent money-back guarantee.
<h3>7. Ask for a Trial Run</h3>
If possible, ask your prospect service provider if they can make a trial run of their services and the features of their check stub maker. This gives you an overview of how it functions and the safety elements built into it. You could list the pros and cons, and make a decision based on how well their platform runs.
<a href="https://www.realcheckstubs.com/blog/paystub-generator/are-paystub-generators-legal">Revealed: Are Paystub Generators Legal?&nbsp;</a>
<h3>Conclusion</h3>
There are plenty of <a href="https://www.realcheckstubs.com/generateStubs" target="_blank" rel="noopener">check stub makers </a>when you search online. However, how much could you trust them, and what qualities and features you need to look for to guarantee your business&rsquo;s security? A good check stub generator has qualities that guarantee a safe and worthwhile experience that helps businesses run a smooth payroll.
Ensure that the paystub maker you choose has a secure payment channel, can safely protect your data from any breaches, cannot be accessed by any third party, positive customer reviews, quality customer service, and a transparent return and refund policy.

One of the most sought features when looking for a trustworthy paystub generator is a secure payment channel. A quality service provider would ensure the safety of your payments by protecting your sensitive bank or card information. It would be best if you always looked for a trusted gateway when transferring funds online.

Does Online Real Check Stubs Maker Have Secure Payment?

Using an online check stub maker means you would need to share personal employee and company information, such as wages and identification numbers. Look for a reliable generator that guarantees the data you share with their server would be encrypted. This eliminates the risk of any data breach that hackers could take advantage of. Check for data encryption that goes through Secure Sockets Layer/Transport Layer Security (SSL/TLS).

What is The Data Policy of Online Real Check Stubs Maker?

Wondering if you can trust online real check stub maker? Find out the pros and cons of using these tools and ensure you're getting accurate pay stubs.

Can You Trust An Online Real Check Stubs Maker?

Can You Trust An Online Real Check Stubs Generator?

Setting up a sound payroll system benefitting both employers and employees is an essential step in starting any business or company. Determining how and when your employees would receive their payments for work done is a necessity to handle your own payroll. This means that it is essential for you to understand <a href="https://www.realcheckstubs.com/blog/paystubs/pay-stub-abbreviations-2022">basic paycheck terminology</a>.
&nbsp;
Read on to learn the difference between the terms pay cycle, payday, and pay period.
<h2>What Is a Pay Cycle?</h2>
Also known as a &ldquo;pay schedule,&rdquo; a pay cycle describes the frequency when an employer pays their employee for work rendered. It tells you how often payroll runs and the specific days your workers receive their salary. The pay cycle takes into account the day that you issue payment to the employee, known as payday, and the period an employee worked that reflects on their paystub, known as the pay period.
&nbsp;
By establishing a pay cycle, your business could create a calendar showing when employees could expect compensation for their work. It would also detail the time duration included in a particular payment.
&nbsp;
As an employer, you would assign pay cycles to positions to help control when employees in such positions are paid. You could also determine the schedule for processing payroll components, such as recurring benefits and earnings, when assigning a pay cycle to the payroll calculation.
&nbsp;
After choosing which pay cycle suits your organization, you could generate a pay period for each cycle. This includes default payment dates based on what information you provide. You could also modify these dates during the stretch of a pay period to handle exceptions, such as when a payment date lands on holiday.
&nbsp;
Pay cycles ensure that employees receive their payment for their work in a regular and predictable fashion. It also gives you information associated with taxes, insurances, and expenses that go hand in hand with deadlines.
<h2>Pay Cycle Types</h2>
As an employer, you have the freedom to set up your own pay cycles when otherwise not dictated by law. The following are different types of pay cycles you could consider.
<h3>- Daily&nbsp;</h3>
Daily paychecks issued at the close of each workday are among the least common type of pay cycle. They could become prohibitively expensive and time-consuming, especially for small businesses. It could be beneficial to less financially stable employees who may need to cover unexpected expenses without waiting for the entire pay period in other types.
&nbsp;
<ul>
<li>Paycheck per year: 365 (at most)</li>
<li>Payroll date: Everyday</li>
<li>Hours per pay period: 8 hours</li>
</ul>
&nbsp;
<h3>- Weekly</h3>
An employee designated with a weekly pay cycle is paid once per week with a specified starting date that automatically updates at the beginning of each pay period. Weekly pay is the most favorable type for workers paid hourly or has irregular schedules and freelancers. It is also best for employees who generate many overtime hours as they could be paid for their time quickly.
&nbsp;
A weekly pay could also become expensive with high time commitment, as you would incur cost and effort each time your payroll runs.
&nbsp;
<ul>
<li>Paycheck per year: 52</li>
<li>Payroll date: Usually every Friday of the week</li>
<li>Hours per pay period: 40 hours (regular) plus overtime (if any)</li>
</ul>
&nbsp;
<h3>- Bi-Weekly</h3>
Bi-weekly pay cycles are the most commonly used type by businesses and organizations. Designating this pay schedule means your employees get paid every two weeks. Their paychecks would arrive on a predetermined day of the week, which usually falls on a Friday.
&nbsp;
Two of the twelve months of the year would only have three pay periods, which could be difficult for some businesses that have to manage irregular bonus periods in their accounting and reporting. This is also true for benefit deductions because they usually occur on a monthly basis. You would need to manage those deductions based on 26 pay periods instead of only 12 for monthly cycles.
&nbsp;
<ul>
<li>Paycheck per year: 26</li>
<li>Payroll date: Usually every Friday of every other week</li>
<li>Hours per pay period: 80 hours (regular) plus overtime (if any)</li>
</ul>
<h3>- Semi-Monthly</h3>
Semi-monthly to bi-weekly pay cycles both pay employees twice a month. That is why some employers confuse and use them synonymously. Unlike bi-weekly pay schedules, which pay every other week, semi-monthly cycles have recurring paychecks twice per month. This means that regardless of how many weeks there is in a month, workers would still receive payments twice per month.
&nbsp;
If you choose to adopt a semi-weekly pay cycle, your employees could receive their salary on the first day and 15th day of the month or the 15th and last day of the month. Accounting teams and salaried employees prefer this method because they expect payroll to run twice a month.
&nbsp;
<ul>
<li>Paycheck per year: 24</li>
<li>Payroll date: Usually the 1st and 15th day, or the 15th and last day of the month</li>
<li>Hours per pay period: 87 hours</li>
</ul>
&nbsp;
<h3>- Monthly</h3>
The least common pay cycle for employees is the monthly-based period. However, they are not entirely unheard of. Some companies and businesses find that they benefit from using this method because it requires less time and lowers the cost to run payrolls. It also makes deducting insurance benefits and other premiums easier as they are charged on a monthly basis.
&nbsp;
While monthly pay cycles are suitable for business owners, it is the least preferred by employees. It would take a month for new workers to receive their first payment. They would also need to wait until the current pay period ends before they receive their paycheck. Employees would also have a hard time managing their personal expenses when they only get paid monthly.
&nbsp;
<ul>
<li>Paycheck per year: 12</li>
<li>Payroll date: End of the month</li>
<li>Hours per pay period: 173.33 hours (average)</li>
</ul>
<h2>What Pay Cycle Suits You The Best?</h2>
Pay cycles dramatically affect your business&rsquo;s operations, especially since it involves money and your employees. It influences your ongoing expenses and overall net income, as well as employee recruitment, retention, and satisfaction. When choosing the most beneficial pay cycle that suits your business, consider these five elements:
&nbsp;
<h3>- Payday Laws</h3>
&nbsp;
While other US states do not have specified regulations to determine your business&rsquo;s pay period, others observe these laws. They dictate when your employees should receive their paychecks, what type of employees have regulated paydays, and if any special exemptions may apply.
&nbsp;
<h3>- Employee Types</h3>
&nbsp;
Review what kinds of workers you have within your organization or business, considering which pay cycle would benefit them. As discussed earlier, you could have different types of employees at the same time with their respective preferred pay cycles. Adopt a more regular pay period, such as weekly cycles for hourly employees and bi-weekly or semi-monthly schedules for most salaried employees.
&nbsp;
<h3>- Costs</h3>
&nbsp;
Make sure to consider your budget as you choose a pay cycle. Each task and responsibility accompanying the management of payrolls have various costs you need to make yourself aware of. Remember that the more often you process paychecks, such as on a daily or weekly basis, the more costs add up. This means that too frequent pay schedules could end up burdening your business.
&nbsp;
<h3>- Cash flow</h3>
&nbsp;
In line with identifying the costs associated with running payroll, you would also need to secure enough cash flow to operate smoothly. Take advantage of the times of the month when your business generates the highest returns, selecting a pay cycle you are equipped to handle and ensures regular paydays occur.
&nbsp;
<h3>- Overtime</h3>
&nbsp;
According to federal law, employers need to <a href="https://www.realcheckstubs.com/blog/paystubs/pay-stub-generator-with-overtime" target="_blank" rel="noopener">calculate overtime rates</a> on a weekly basis. For example, an hourly, non-exempt employee would have a payroll that needs to include overtime weekly. You should also take into account this element even when using a bi-weekly or semi-monthly pay schedule.
&nbsp;
Businesses that employ hourly workers that most likely generate large amounts of overtime may run a payroll better using a weekly pay cycle.
<h2>How To Set Up Pay Cycles</h2>
An employer uses pay cycles to determine the frequency of pay periods and paydays for each position. First, list how many distinct combinations of pay cycle frequencies and pay dates your business uses, as each combination requires you to use a separate pay cycle.
&nbsp;
For example, your business could have a semi-monthly pay cycle frequency paid every first and fifteenth day of the month for management positions. Salaried or non-management positions could receive payment on the last day of the pay period in a weekly or bi-weekly cycle. Meanwhile, hourly employees could receive their pay on the Friday after the last day of the pay period.
&nbsp;
In this case, you would need to use three types of pay cycles, which you would then assign one to each position in your organization. To create a new pay cycle, specify a position&rsquo;s name and description. Then determine which of the following pay cycle frequencies is the most suitable for every position. It could be daily, weekly, bi-weekly, semi-monthly, monthly, quarterly, semiannually, and annually.
&nbsp;
In some cases, different groups of positions could have the same pay cycle but have different paydays. As such, you could pay both salaried and hourly employees a bi-weekly frequency. If both positions receive their payment on the last working day of the pay period, you could employ the same pay cycle for salaried and hourly workers.
&nbsp;
However, if hourly employees receive payment on the Friday after a pay period&rsquo;s last working day, but salaried workers receive payment on a pay period&rsquo;s last working day, you need to assign two bi-weekly cycles for each type. Designate one bi-weekly pay cycle for salaried workers and another bi-weekly pay cycle for hourly workers.
<h2>What Is a Payday?</h2>
This is usually your employees&rsquo; favorite day during the pay period. Also known as the check date, payday is when they regularly receive their compensation, typically in the form of paychecks. Payday depends on which pay cycle you choose based on the previous considerations discussed.
&nbsp;
Payday also determines the due dates for payroll tax filings and deposits, reflecting on the paychecks or paystubs issued. It is your responsibility to meet the required deadlines for paying monthly federal and state taxes. This is still true even when you issue only a single paycheck. If you fail to deliver on time properly, you could face penalties that could hurt your bottom line.
<h2>What Is a Pay Period?</h2>
Pay period refers to the full stretch of time your employees performed their jobs. This is the total hours or days a worker completes before payday. For example, if your employees worked from April 1st to 15th, the amount of time done is the pay period, reflecting on their paystubs.
&nbsp;
As previously discussed, daily pay periods produce at most 365 paychecks per year, while weekly pay periods generate approximately 52 paychecks per year. Daily and monthly pay periods are the least common and least popular types for employers and employees. Meanwhile, monthly, semi-monthly, and biweekly make 12, 24, and 26 paychecks each year, respectively.
&nbsp;
Employee paystubs reflect pay periods detailing how many hours an employee worked before payday. The check stubs also include the pay rate, benefits, and deductions, such as taxes withheld and contributions. For salaried and exempt employees, their pay depends on an annual amount divided by the number of pay periods in a year.
<h2>Conclusion</h2>
Running a smooth business means that you need to consider and understand every aspect of each element carefully and monitor them closely. One of the most potentially confusing topics is the difference between pay cycle, payday, and pay period.
&nbsp;
The pay cycle describes the frequency of when employees receive their payment, payday refers to the day they receive the payment, and pay period covers the time your employees performed their jobs. Determining these terms are essential as they influence your ongoing expenses and overall net income, as well as employee recruitment, retention, and satisfaction.

Also known as a 'pay schedule,' a pay cycle describes the frequency when an employer pays their employee for work rendered. It tells you how often payroll runs and the specific days your workers receive their salary. The pay cycle takes into account the day that you issue payment to the employee, known as payday, and the period an employee worked that reflects on their paystub, known as the pay period.

What Is a Pay Cycle?

Pay cycles dramatically affect your business’s operations, especially since it involves money and your employees. It influences your ongoing expenses and overall net income, as well as employee recruitment, retention, and satisfaction.

What Pay Cycle Suits You The Best?

An employer uses pay cycles to determine the frequency of pay periods and paydays for each position. First, list how many distinct combinations of pay cycle frequencies and pay dates your business uses, as each combination requires you to use a separate pay cycle.

How To Set Up Pay Cycles?

Learn the difference between pay cycle, pay day, and pay period.  Stay informed and take control of your finances with our helpful guide.

The Difference Between Pay Cycle vs Pay Day vs Pay Period

Pay Cycle, Pay Day, Pay Period - What’s The Difference Between Them?

For some, doing payroll for a small business is the least enjoyable part of the job. It could become tedious and costly if not done properly and efficiently.
&nbsp;
Luckily, with these helpful 9 tips for your small business, running payroll for your employees would be easier, faster, more accurate, and more reliable than ever before.
<h2>Set Up a Payroll System</h2>
Setting up a good payroll for small businesses entails you would have to choose from three options. It could be either a;
<ol>
<li>manual,</li>
<li>outsourced, or</li>
<li>a software-based system that helps you <a href="https://www.realcheckstubs.com/blog/paystubs/best-paystub-generator-2022">calculate and manage your employees&rsquo; paychecks</a>.</li>
</ol>
So before making a decision, weigh in several factors such as budget, your number of employees, and your confidence in making a good payroll.
&nbsp;
Some small businesses still opt to do payroll by hand. Although a manual payroll may save you on initial costs, it is the most tedious and time-consuming system in the long run. It is also at a disadvantage when you have many employees and the most prone to errors, leading to a higher cost of financial repairs.
&nbsp;
If you have extra cash, you could choose to hire outside service from paycheck companies to do your payroll for you. Their assistance usually involves everything from preparing and processing paychecks to handling payroll taxes, withholding taxes, deposits, etc. However, if you have a tight budget outsourcing your payroll is most likely not an option.
&nbsp;
When setting up a payroll system, the best option is to use cloud-based software that would give you access to all payroll information in one place. It combines the best from both a manual and outsourced method. A paystub maker for a small business is a cost-effective, time-saving, accurate, and convenient way of processing information.
<h2>Understand and Follow Wage Laws and Tax Deadlines</h2>
As an employer, you should have proper knowledge and understanding of federal, state, and local wage and tax laws. You should also be familiar with essential deadlines and legal and financial obligations as a small business owner.
&nbsp;
<a href="https://www.realcheckstubs.com/generateStubs" target="_blank" rel="noopener">An online cloud-based system, such as Real Check Stubs</a>, would give you up-to-date wage and tax rates, as well as remind you of significant dates for when to file for W-2s. Online software makes sure that you are paying the correct employment taxes on the payroll for small businesses. It accurately <a href="https://www.realcheckstubs.com/blog/paystubs/the-2022-fica-limit-on-paystubs-recent-changes" target="_blank" rel="noopener">computes FICA taxes</a> (Social Security and Medicare) which you could monitor and keep track of.
<h2>Decide Carefully on Pay Schedule and Wage Status</h2>
Your payroll for a small business involves various vital decisions, including <a href="https://www.realcheckstubs.com/blog/paystubs/pay-cycle-pay-day-pay-period-whats-the-difference-between-them">pay frequency</a> and salary status.
&nbsp;
- Pay schedule or pay frequency determines when you pay your employees and how often they receive their payment. For a small business, you have plenty of options when it comes to how often you create a payroll. It could be weekly, bi-weekly, or monthly time frame, depending on the overall size of your business. If you have fewer workers, you may be able to apply more frequent scheduling.
&nbsp;
- Wage status refers to how you pay your employees, either at an hourly rate (non-exempt) or in a salary-based (exempt) amount. A payroll system for a small business would have issues if non-exempt and exempt employees. Paying your staff a salary could help you manage your payroll easier, as they would always receive the same amount each pay period. Meanwhile, paying by the hour could be more complex and tedious as you would need to keep track of the total number of hours worked.
&nbsp;
An integrated payroll software such as a paystub maker for small businesses would give you accurate calculations for your worker&rsquo;s compensations.
<h2>Establish a Standard Payroll Policy and Process</h2>
It is vital to develop and establish a standard payroll policy and process before making your first payroll. Documenting your payroll process ensures that everyone on your staff, from management to your employees, is aware of how payroll functions. If you have extra cash to spare, you could also enlist the assistance of a payroll service company to create one for you.
&nbsp;
A payroll policy would tell the members of your business how much they expect to take home when the pay schedule is and how their benefits such as leave and overtime are computed and paid. In the event that you need to hire new employees, the payroll process would make training easier and faster. Make sure to include all details of how payroll for a small business plays a role, from an employee&rsquo;s hiring and orientation to termination.
<h2>Set Your Budget</h2>
Always secure your budget for salaries and taxes when you plan to run your online payroll for the business. Include federal and state taxes, as well as Social Security and Medicare, which you as an employer need to match. You need to withhold FICA taxes from your employees&rsquo; payments each pay period and deduct them from their gross earnings. Constantly get updates of current wage and tax rates so you could better prepare and set your budget ahead of time.
<h2>Determine How Long to Keep Records and Which Document To Store</h2>
To keep yourself from getting a visit from the IRS, your payroll for your small business should maintain a good and clean record. As an employer, you should be prepared for any possibility, and the best way to do that is by keeping every form of your tax filings, payrolls, and employment documentation.
&nbsp;
According to the rules of the IRS, you should keep your tax records for at least three years and your employment records for four years. However, many experts recommend keeping all your documents for at least seven years. Moreover, you do not only need to store all records but also ensure you have good records.
&nbsp;
Consider keeping both physical and electronic copies of every document. A cloud-based software system would store all of your financial information regarding payroll. If the government ever decides to conduct an audit, you could access and check each record quickly.
&nbsp;
For your employees, advise them to<a href="https://www.realcheckstubs.com/blog/paystubs/how-long-to-keep-pay-stubs"> save their paystubs for at least three years</a> and their time cards for two years.
<h2>Secure Your Employer Identification Number</h2>
As an owner, you would need to have an employer identification number (EIN). You would also need your EIN before listing employees on your payroll. The EIN identifies your small business for tax purposes, much as the Social Security number (SSN) identifies you.
&nbsp;
If your business is a corporation or a partnership, you should have an EIN. However, if you do not have a number, you would need to acquire one through the IRS. Additionally, depending on the location of your business, you might need to apply for a state-level EIN aside from <a href="https://www.realcheckstubs.com/blog/paystubs/where-to-find-fein-number-on-pay-stub" target="_blank" rel="noopener">the federal EIN</a>.
<h2>Complying with the IRS</h2>
Ensure that you need to ascertain that all your payroll documents comply with the Internal Revenue Service (IRS) before filling out any required forms. This means you would also need to make sure that you organize your payroll for your small business. Doing these measures would help you to protect your company from IRS fines and penalties effectively.
&nbsp;
You should also guarantee that your employees have an employee identification number (EIN) when running payroll. Make yourself familiar with employment and payroll compliance laws. The IRS provides information on their online website if you need additional assistance.
<h2>Regularly Audit Your Payroll System</h2>
Even with an automated payroll system for your small business, you should still regularly audit your records. This adds a layer of protection for your business, allowing you to avoid any issues. It would help you identify misclassifications and find any employees no longer working for you. Auditing could also spot accidental errors made by employees on their timecard entries.
&nbsp;
If you use software, you should always remember that they are not a perfect technology. An online payroll for business would definitely make your job easier and faster, but do not rely on it entirely. Review the numbers and reports to check for accuracy and compliance.
&nbsp;
You could also opt to hire the service of paycheck companies. They have systems that would ensure accuracy, and they guarantee to keep updated with the latest laws and regulations. Rest assured that these companies know how to run payrolls thoroughly and adequately.
<h2>Conclusion</h2>
As an employer, doing payroll for your small business could be a smooth and fulfilling experience when you consider the best practices. Setting up a good system, understanding and following wage laws and tax deadlines, deciding on a pay period and salary rates, creating a standard payroll policy and process, setting a budget, keeping records, securing your EIN, complying with the IRS, and regularly auditing your payroll are some of the best advice that would help you run a good payroll.

According to the rules of the IRS, you should keep your tax records for at least three years and your employment records for four years. However, many experts recommend keeping all your documents for at least seven years. Moreover, you do not only need to store all records but also ensure you have good records.

How Long to Keep Tax Records?

Get the best payroll advice for small businesses.  Maximize efficiency and protect your business with our expert tips about paycheck stubs.

Best 9 Payroll Tips For Small Businesses

Best Payroll Advice For Small Businesses

It is good to understand how much taxes and deductions are, how they are calculated, and where they are going. While there are many deductions listed, one of the best places to start is by identifying the FICA on a <a href="https://www.realcheckstubs.com/blog/paystubs/what-is-a-pay-stub-a-guide-to-understanding-your-pay-stub" target="_blank">paycheck stub</a>. Here is everything you would need to help you understand what the FICA tax is for, why your employer withholds them and who benefits from them.<h2>What Is FICA Tax?</h2>FICA stands for the Federal Contributions Act that requires employers to withhold three different types of taxes taken out of an employee's paychecks. These taxes are mainly used for two things: first, to cover Social Security retirement payments for older Americans; and, second, to cover premiums for Medicare (Hospital Insurance) benefits. A third purpose of the FICA is to cover the Medicare surtax for certain high-paid employees. Originally created in 1935 by President Franklin Roosevelt, the FICA tax is a mandatory payroll deduction taken out each pay period. The federal tax was created to provide money for retirement for elderly and retired citizens. Anyone working and earning income, whether self-employed or salaried, should pay into the fund on a semi-weekly or monthly basis. The two main separate taxes combine to make the FICA tax, which pays for both Social Security retirement benefits and Medicare health insurance. FICA also pays for benefits for widowers and widows, qualified disabled workers, and children who lost their working parents.You may be interested:&nbsp;<a href="https://www.realcheckstubs.com/blog/tax/what-is-suta-tax-rates-obligations-calculations" style="background-color: rgb(255, 255, 255);">What is SUTA? Tax Rates, Obligations, Calculations&nbsp;</a> <img src="https://www.realcheckstubs.com/storage/posts/Screen Shot 2021-06-11 at 10.02.22 AM.png" alt="What Is FICA Tax?" title="What Is FICA Tax?"> <h2>What Does FICA Stand For?</h2>The Federal Insurance Contributions Act (FICA) is a federal tax law equally split between the employer and employee. The amount is a percentage of each employee's taxable income consisting of the Social Security and Medicare payments. So what does FICA stand for on a check stub? It is simply the amount shown beside the FICA tax label is the sum of both the amount for the Social Security and Medicare taxes.Discover&nbsp;<a href="https://www.realcheckstubs.com/blog/paystubs/pay-stub-abbreviations-2022">Paycheck Stub Abbreviations</a> <h3>- Social Security Payments (FICA-SS)</h3>Social Security is a government-run program offering benefits to people when they retire or for individuals who qualify for the benefits. The fund comes from payments made by employees, employers, and self-employed people each pay period. It sends money to people to help them with their living wages. This FICA tax constitutes 12.4 percent of an individual's compensation withheld each payroll. It is also directed first and reported to the IRS and then passed on to the Social Security Administration for distribution to retirement and disability payments. Throughout an individual’s working career, the amount collected from the FICA deduction on a paystub is linked to the Social Security benefit they receive after they retire, or a family receives if they die. <h3>- Medicare Insurance (FICA-Med)</h3>Designed primarily for retired or elderly individuals, the Medicare tax on paystub goes to the government's Medicare trust health insurance program. The share employees contribute each time they receive their check stub helps these people and anyone who qualifies to receive medical care. <img src="https://www.realcheckstubs.com/storage/posts/what does fica stands for.jpg" alt="- Medicare Insurance (FICA-Med)" title="Medicare Insurance (FICA-Med)"> <h2>Is FICA Mandatory?</h2>As per law, FICA taxes are mandatory employment taxes that an employer needs to calculate and withhold in each employee's payroll. The employer splits the cost in half with the employee deducting the amount due from the employee's paycheck. They then deposit the collection on a semi-weekly or monthly basis, depending on the average size of their contributions for the past year. The deposits are reported through Form 941, a quarterly payroll tax report given to the Internal Revenue Service (IRS) and sent using the Electronic Federal Tax Payments System (EFTPS). Additionally, all new businesses have to start depositing monthly.&nbsp;Employers must send the IRS Form 941 on the last day of the month after the end of each quarter. For example, for the first quarter of the year, the form should be filed on the last day of April. This would cover wages paid from January through March.<h2>How Is FICA Calculated?</h2>As discussed earlier, the FICA tax for most employees is mainly composed of two amounts, the Social Security portion and the Medicare portion. The next question is how much the FICA tax is and how FICA on a paycheck stub is calculated for each employee.<a href="https://www.realcheckstubs.com/blog/paystubs/the-2022-fica-limit-on-paystubs-recent-changes">The FICA Limit on Paystubs for 2023&nbsp;</a> <h3>- Social Security</h3>Before going into how much Social Security is and how to compute it, we must first determine what a wage base limit is. A wage base limit applies to all employees that pay Social Security taxes. This makes a gross income above a certain threshold exempt from this tax. On the other hand, Medicare taxes do not have a wage limit. For 2023, the wage base limit is $160,200. This means that this is the maximum amount of income employers must consider when withholding Social Security benefits. If the employee's compensation exceeds the wage limit, which changes almost every year based on inflation, employers should not withhold Social Security taxes. The employer and the employee both pay 6.2 percent of gross compensation for the Social Security portion of the FICA on a paystub, totalling 12.4 percent. For example, if an employee earns $2,400 per payroll period, the employer then withholds $148.80 for the employee's share and pays an additional $148.80 for the employer's share. This makes a total of $297.60 paid into Social Security. <h3>- Medicare</h3>Unlike Social Security, Medicare tax on paystub does not have a wage base. This means that no matter how much an employee makes, the employer would deduct a total of 2.9 percent for the Medicare tax. The employer and the employee would both pay 1.45 percent of the employee's gross income. Like the first example, if an employee earns $2,400 per payroll period, the employer withholds $34.80 for the employee's share and then matches it with the same amount equivalent to 1.45 percent. Therefore, the employee would have a total of $69.60 paid into the Medicare fund.&nbsp;<h3>- Medicare for High-Earners</h3>In some instances, the employer must withhold an additional 0.90 percent in Medicare tax on paystub for compensation over a threshold amount. However, for this tax, the employer would not match the payment. Depending on the employee's tax filing status, Medicare for high-earners is due compensation over specific threshold amounts.&nbsp;<ul><li>- Individuals earning over $125,000 in compensation yearly, if married and filing taxes separately</li><li>- Individuals earning over $250,000 in compensation yearly, if married and filing taxes jointly</li><li>- Individuals earning over $200,000 in compensation yearly, for all other tax filers</li></ul> It is important to remember that the IRS requires employers to begin withholding the FICA deduction on a paystub once an employee's income exceeds $200,000 annually. This is still true regardless of whether the employee would owe the surcharge amount based on the mentioned thresholds. For example, if a single worker earns $9,000 every two weeks for a year, that worker makes an annual compensation of $216,000. Thus, the income would be subject to the additional Medicare surcharge since it exceeded the $200,000 threshold. The employee's Medicare tax would be computed as follows: - Initially, the employer and employee would pay their share of 1.45 percent of the employee's compensation in regular Medicare taxes. The withheld tax would equal $130.50 per payroll period, which the employer would need to match exactly. This comes to a total of $261 per payroll period reflected on the check stub. - Next, due to the employee's compensation qualifying as a high-earner, the employer would need to withhold the additional 0.90 percent on income above $200,000. This means the employer would not withhold the Medicare surcharge until the worker's income exceeds the threshold for the year. It is likely that the additional Medicare tax on the pay stub of this employee would show on the last month of the work year. <img src="https://www.realcheckstubs.com/storage/posts/fica tax on my pay stub.jpg" alt="Medicare for High-Earners" title="Medicare for High-Earners"> <h2>Should Self-Employed Workers Pay FICA Tax?</h2>Unless your business is incorporated, you must pay both portions of the FICA tax for the employer and employee as a self-employed worker. Instead of the federal tax, your check stub would show "Self-Employment" tax in its place. Business owners and other self-employed individuals pay the entire 15.3 percent of their wages. This is the same as the FICA deduction on paystub for employees. The amount due is calculated the same way and composes the same taxes, 12.4 percent for the Social Security tax and 2.9 percent for the Medicare tax. For high-income workers, this also includes the additional Medicare tax. The self-employment tax is reported on Schedule SE along with your income tax returns. You could then deduct the equivalent of the employer portion of the tax in figuring out your <a href="https://www.realcheckstubs.com/blog/w-2-form/how-to-calculate-agi-adjusted-gross-income-from-w-2" target="_blank">adjusted gross income (AGI)</a>. This helps to offset the burden of the FICA tax on self-employed individuals and business owners.<h2>What is the Employers' Responsibility for FICA Payroll Taxes?</h2>After each payroll, employers are responsible for withholding and submitting FICA taxes for their share and the employee's share. Some employers could submit the payments semi-weekly or monthly depending on their tax liability for the previous four quarters. If the employer reports more than $50,000 in taxes in the previous four quarters, then they should file semi-weekly deposits to the IRS. As such, if the employer pays their employees on Monday, Tuesday, or during the weekend, then the taxes must be filed by next Friday. Meanwhile, if you pay your employees on a Wednesday, Thursday, or Friday, the taxes should then be deposited by the following Wednesday. If the employer reports less than $50,000 in taxes the previous quarter, they should monthly file the FICA taxes. This means that when depositing monthly to the IRS, the amounts are due by the 15th of the month of the following payroll. Moreover, Form 941 should be filed quarterly to report payroll amounts, and tax withholding amounts every three months. The due date for the first quarter is on the 30th of April, the second quarter on the 31st of July, the third quarter on the 31st of October, and finally, for the fourth quarter on the 31st of January the following year. <img src="https://www.realcheckstubs.com/storage/posts/what is fica tax.png" alt="Employers' Responsibility for FICA Payroll Taxes" title="Employers' Responsibility for FICA Payroll Taxes"> <h2>FICA Tax Exemptions</h2>Almost everyone working has to pay Social Security and Medicare Taxes. Whether you are a part-time or full-time employee or self-employed, you are required to withhold FICA taxes. This also includes resident aliens and many non-resident aliens. However, there are some types of compensation exempted from paying such taxes. Here are a few types of payments to employees not subject to FICA tax withholding. <ul><li>- Payments to general or limited partners in a partnership</li><li>- Salary paid to disabled workers after becoming eligible for Social Security disability insurance benefits</li><li>- Employer contribution to qualified retirement and pension plans</li><li>- Salary paid after a worker's death</li><li>- Wages paid to students earning from on-campus jobs while enrolled and regularly attending classes</li><li>- Income from tips less than $20 per month</li><li>- Salespeople with a statutory nonemployee status</li><li>- Children under 18 years old employed by a parent</li><li>- Employees' compensation payments</li><li>- Expense reimbursements of employees under the specific government rate for per diem or the standard mileage</li></ul><h2>Overpaying FICA Taxes</h2>In some instances, employees pay more Social Security taxes than required. This might happen if you switch jobs, often having your earnings taxed. Even if the combined salary you receive exceeds the Social Security wage base limit, it is still subject to FICA deduction on a paystub. Fortunately, excess FICA tax could be refunded when you file for your taxes. If you have one job and you overpaid the Social Security tax, you would need to request your employer for a refund. Meanwhile, if you have multiple jobs, you could claim the overpayment using Form 1040. Additionally, if you owe any taxes, the IRS would automatically deduct the amount from your refund to pay them off. For Medicare tax, excess repayments are nonrefundable since it has a wage base limit, unlike the Social Security tax.<h2>Conclusion</h2>Now that we have answered the question "What is FICA on my paystub?" and understood all its components, it is essential to keep in mind the benefits of paying such taxes. <a href="https://www.realcheckstubs.com/generateStubs" target="_blank">As for calculating the FICA deduction on paystub with the correct rate, Real Check Stubs has you covered. </a>FICA taxes could be overwhelming, especially for the self-employed, but they are essential in helping retirees and other qualified beneficiaries.

FICA stands for the Federal Contributions Act that requires employers to withhold three different types of taxes taken out of an employee's paychecks.

What Is FICA Tax?

The Federal Insurance Contributions Act (FICA) is a federal tax law equally split between the employer and employee. The amount is a percentage of each employee's taxable income consisting of the Social Security and Medicare payments.

What Does FICA Stand For?

As discussed earlier, the FICA tax for most employees is mainly composed of two amounts, the Social Security portion and the Medicare portion. The next question is how much the FICA tax is and how FICA on a paycheck stub is calculated for each employee.

How Is FICA Calculated?

Confused about FICA on your paystub? Learn what the FICA tax rate is, how it is calculated, and how it affects your income with the latest changes.

What Is FICA On My Paystub? | Real Check Stubs

What Is FICA On My Paystub?

Are you in the process of looking for a new apartment? Have you recently come across a place that you&rsquo;d really like to call your new home? If that&rsquo;s the case, you&rsquo;ll have to go through a number of administrative steps with your potential new landlord.
Landlords have the right to request numerous kinds of information before figuring out who their new tenant is going to be. And while there are various questions a landlord definitely cannot ask, inquiries about income aren&rsquo;t included in that list.
In fact, you&rsquo;ll often be asked to <a href="https://www.realcheckstubs.com/blog/paystubs/proof-of-income-everything-you-should-know-about-it" target="_blank" rel="noopener">provide proof of income</a> in order to be considered a suitable candidate for the place. Not only that, you will need to establish the fact that you&rsquo;ve been employed for some time and that you enjoy career stability as an employee.
Showing that you have some type of employment and stable income is very important &ndash; you&rsquo;ll be considered a reliable candidate this way. <a href="https://www.realcheckstubs.com/blog/paystubs/how-many-pay-stubs-for-apartment" target="_blank" rel="noopener">Apartment pay stubs</a> rank among the documents used most often as proof of income.&nbsp;
If you&rsquo;re wondering about the specifics of handing over pay stubs to a potential landlord, the following guide will answer some of the most prominent and popular questions on the topic.
<img src="https://www.realcheckstubs.com/storage/posts/check-stubs-for-renting-apartment.webp" alt="check stubs for renting apartment" width="640" height="350" />
<h2>Why Would I Need Apartment Pay Stubs to Find a Rental?</h2>
It&rsquo;s easy to understand why proof of income is going to be very important when property owners consider potential tenants for their place.
Many landlords have had to deal with payment issues in the past. By asking you for proof of income, a property owner isn&rsquo;t assuming you can&rsquo;t handle the rent in the long run. That&rsquo;s just a simple step that acts as insurance at the time of renting out the apartment.
The aim here is to make sure that a tenant is financially stable to cover the cost of living in the respective place. 
Stable income, making enough and having been with the same company for a certain period of time all give landlords peace of mind. The landlord would probably want to make sure that a candidate for the place will be living within their means.
So, how is your income going to be judged when your paycheck stubs are being examined?
<h3>The 3X Rule in the World of Real Estate</h3>
Anyone who has done basic research knows that the 3X rule applies to apartment rentals.
The <a href="https://www.financereference.com/3x-rent-rule-what-is-it-and-how-to-use-it/">3X rule</a> is pretty self-explanatory &ndash; a tenant should be making at least three times the amount of the rent that a landlord is asking for.&nbsp;
Financial experts have made the calculation and they believe that the ratio makes it possible for tenants to cover the rent and to also pay additional expenses connected to living in the flat (bills, groceries, house maintenance and cleaning, etc.).
Statistics suggest that people who make less than three times the rental amount are more likely to be late with payments and to struggle with those. Also, landlords wouldn&rsquo;t want to select a tenant who would be struggling financially in all other aspects of life just because they want to afford the respective flat.
And while exceptions to the rule do exist, most landlords use the 3X rule as a general guideline for the selection of reliable tenants.
<h2>How Many Paystubs Can a Potential Landlord Ask for?</h2>
Now that you know you&rsquo;ll probably be asked for pay stubs as proof of income, you probably would want to get some information on the number of forms that a potential landlord will have the right to ask for.
There isn&rsquo;t a rule set in stone as far as the number of paycheck stubs goes.
Most landlords will ask for anywhere between two and three pay stubs for the past few months (they will have to be recent). Showing an even bigger number than that demonstrates stability. If you&rsquo;ve been with a company for a while and you&rsquo;re confident in your professional future, you can demonstrate the fact by offering a potential landlord at least three paystubs for your latest pay periods.
<h2>Will I Have to Provide Additional Proof of Income on Top of the Pay Stub for Apartment Rental?</h2>
Now that we&rsquo;ve answered the question &ldquo;<a href="https://www.realcheckstubs.com/blog/paystubs/how-many-pay-stubs-for-apartment">how many pay stubs do I need for an apartment</a>&rdquo; it&rsquo;s time to examine another very common inquiry.
That one pertains to additional forms that can be requested to verify income.
Most often, a landlord is going to verify a certain number from multiple sources to guarantee the accuracy of the information you&rsquo;re providing.
Additional forms and documents that can be used as proof of income include:
<img src="https://www.realcheckstubs.com/storage/posts/check stubs for renting apartments.png" alt="Check Stubs for proof of income" width="1228" height="748" />
<ul>
<li style="font-weight: 400;" aria-level="1">Bank statements: people who receive their salary in a bank account can feature an official bank statement alongside their paycheck stubs.&nbsp; Bank statements will once again suggest a stable income and they will provide additional information, especially if you have some savings that you can count on.</li>
<li style="font-weight: 400;" aria-level="1">W-2 form: &nbsp;the <a href="https://www.investopedia.com/terms/w/w2form.asp">wage and tax statement form</a> can be provided alongside pay stubs or instead of them to verify your income. Your W-2 form will feature information on the income you earned over the course of the last fiscal year. Depending on when you&rsquo;re applying for a new rental, however, that information could be considered a little bit outdated. Usually, W-2 forms are provided alongside recent paycheck stubs and not instead of them.</li>
<li style="font-weight: 400;" aria-level="1">Proof of income letter: depending on your situation, you can ask an employer to create an official proof of income letter you can use for the specific purpose of an apartment rental. The proof of income letter (signed by your employer) verifies the fact that you&rsquo;re the company&rsquo;s employee and that you&rsquo;re earning a certain amount there.&nbsp; As a proof of income letter can feature various kinds of information so ask a potential landlord exactly what they need to find out before taking matters to your company&rsquo;s HR department.</li>
<li style="font-weight: 400;" aria-level="1">Tax returns:&nbsp; a tax return works in a manner similar to what a W-2 form does. It delivers information on the latest fiscal year and it&rsquo;s not the most reliable proof of current income.</li>
<li style="font-weight: 400;" aria-level="1">Disability insurance, pension or retirement documentation</li>
</ul>
<h2>What if My Employer Doesn&rsquo;t Provide Me with Paystubs?</h2>
If you live in a part of the US that has no regulations on companies handing out paycheck stubs to your employees, you could be dealing with a sticky situation.
Before doing anything else, make sure that your employer doesn&rsquo;t have a paycheck stub system in place. It&rsquo;s possible for the organization to issue and distribute electronic paystubs without you being aware of the fact.
You have the right to access some kind of pay information. Your employer cannot withhold such details from you. Even if the form you get is not a paycheck stub, it should still feature details on how much you earn.&nbsp;
In case an employer is stubbornly <a href="https://www.realcheckstubs.com/blog/paystubs/what-if-employer-doesnt-give-you-pay-stub">refusing to provide</a> any kind of payment or income information, you have the right to take things to court. Consulting an experienced lawyer will shed more light on your rights and the way in which you can request information that should rightfully be provided to you.
<h2>What If I&rsquo;m Self-Employed?</h2>
Do you need pay stubs to rent an apartment if you are self-employed?
The answer will still be yes for many potential landlords.
Self-employed individuals, solo proprietors and those who run a home-based business are not somebody&rsquo;s employee. As a result, they are responsible for handling income documentation and filling out all essential forms.
As a self-employed professional, you can employ <a href="https://www.realcheckstubs.com/blog/paystub-generator/benefits-of-using-online-pay-stub-generator">paycheck stub generators</a> to come up with your own forms.
The important thing here is to make sure every single number featured in the paycheck stub is correct.
Apartment pay stubs will be double checked. And if you feature wrong information (even in the case of an honest mistake), you could be running into some trouble.
<h2>Can I Make My Own Paystubs for Apartment Rental Purposes?</h2>
Yes, you can <a href="https://www.realcheckstubs.com/blog/paystubs/is-it-legal-to-make-your-own-paystubs">make your paycheck stub</a>.
But if you&rsquo;re asking how to make fake pay stubs for apartment rental, that&rsquo;s a whole different topic.
Do you want to know how to fake pay stubs to rent apartment properties in your area? The short answer is don&rsquo;t.
Falsifying the information you will deliver to a potential landlord will be very easy with the right type of software product. The thing here is that the paycheck stub will be verified before a landlord agrees to let you in their property.
Having wrong income information featured on a paycheck stub that you&rsquo;ve created on your own will be considered fraud in many parts of the US.
As a result, you&rsquo;ll not only run into problems with an eventual landlord, you&rsquo;ll also have to deal with the legal consequences of committing financial fraud. While you may be eager to score an exceptional apartment, the reward is simply not worth the risk you&rsquo;re going to be taking on.
<h2>Proof of Income Verification: An Important Step You&rsquo;ll Have to Go Through</h2>
Proof of income verification is something you will have to go through, no matter how confident and secure you feel in your financial capabilities.
A landlord has the right to request both a paycheck stub and a bank statement.
Some landlords will even go ahead to get in touch with your employer and double check the figures you have supplied. This usually happens whenever a property owner has had to deal with fake paycheck stubs in the past.
Keep in mind, however, that HR departments have the obligation to protect sensitive and personal information. As a result, they&rsquo;re not likely to divulge specific digits. Chances are that they&rsquo;ll only verify the fact that you&rsquo;re employed by the specific organization and that you&rsquo;ve been issued official paystubs.
<h2>Can I Get an Apartment without Showing a Paystub or Another Type of Income Proof</h2>
Anyone who has lower income or who is facing an employment transition will probably wonder about getting a new apartment without having to show proof of income.
That&rsquo;s going to be a difficult task, especially when it comes to attractive properties that many people are interested in.
Yes, it is possible to rent an apartment without showing paystubs, having to create your own forms or being forced to provide tax information and other IRS documentation. For the purpose, however, you will need to maintain an excellent credit score. You&rsquo;ll also have to potentially consider getting a lease co-signor.
A final idea worth exploring would be to consider rentals by an owner instead of a company. Most attractive apartments on the market are owned by companies or agencies. these entities have very strict rules and requirements when it comes to tenant characteristics and incomes.
Renting an individual property that has a single owner (a person) can help you reduce the administrative burden you&rsquo;ll need to face.
Some owners may be willing to help you out if you are between jobs or you&rsquo;re <a href="https://www.realcheckstubs.com/blog/business/how-to-make-pay-stubs-for-small-business">starting your own business</a> and you lack pay stubs at the time being. Such owners, however, can be more difficult to find. Also, you&rsquo;ll need to be persuasive enough in order to convince a potential landlord about your reliability.
<h2>Final Verdict: Pay Stubs for Apartment Rentals Are Included in the Standard Procedure</h2>
Do you need pay stubs to rent an apartment? The answer to that question will be yes most of the time.
How many paystubs for apartment do you need? At least two or three will be requested.
Finally, can you fake a pay stub in order to be considered a good candidate for a certain property? Technically, the answer to that question is yes. With today&rsquo;s technology, you can accomplish just about anything. Having a landlord discovering the fact that you&rsquo;ve provided fake information, however, will lead to repercussions.
Paycheck stubs are proof of income and as such, they&rsquo;re invaluable tools for getting the apartment you&rsquo;ve always dreamed of.
Even if you are a self-employed person, a small business owner or a freelancer, you can still get a paycheck stub that you can use to convince a landlord to make you their next tenant.
Searching for your new home should not be hard, so use&nbsp;<a href="https://www.realcheckstubs.com/">a paystub generator or check maker, such as Real Check Stubs, to create a reliable document.</a>&nbsp;Landlords are sure to be more considerate if they have a good sense of your status.
&nbsp;

It’s easy to understand why proof of income is going to be very important when property owners consider potential tenants for their place. Many landlords have had to deal with payment issues in the past. By asking you for proof of income, a property owner isn’t assuming you can’t handle the rent in the long run. That’s just a simple step that acts as insurance at the time of renting out the apartment.

Why Would I Need Apartment Pay Stubs to Find a Rental?

Most landlords will ask for anywhere between two and three pay stubs for the past few months (they will have to be recent). Showing an even bigger number than that demonstrates stability. If you’ve been with a company for a while and you’re confident in your professional future, you can demonstrate the fact by offering a potential landlord at least three pay stubs for your latest pay periods.

How Many Paystubs Can a Potential Landlord Ask for?

If you live in a part of the US that has no regulations on companies handing out paycheck stubs to your employees, you could be dealing with a sticky situation. Before doing anything else, make sure that your employer doesn’t have a paycheck stub system in place. It’s possible for the organization to issue and distribute electronic paystubs without you being aware of the fact. You have the right to access some kind of pay information. Your employer cannot withhold such details from you. Even if the form you get is not a paycheck stub, it should still feature details on how much you earn.

What if My Employer Doesn’t Provide Me with Paystubs?

Discover why check stubs are important for renting apartments. Learn what information to include and how to properly present your income.

How to Get Check Stubs For Renting Apartments?

Check Stubs For Renting Apartments – Why Is It Important

<a href="https://www.realcheckstubs.com/blog/paystubs/what-is-a-paystub-and-what-does-a-paystub-look-like" target="_blank" rel="noopener">Pay stubs contain essential information </a>such as net and gross wages, taxes and deductions, benefits, and work hours. They also include essential data such as the names of employees, their employers, and addresses.
&nbsp;
With that said, let us look at the answers to the questions on why and how long should you keep pay stubs.
<h2>5 Reasons for Saving Pay Stubs</h2>
&nbsp;
<h3>1. Keep Track of Your Earnings and Work Hours</h3>
&nbsp;
Most of the time, employees overlook and ignore their pay stubs once they have received their salaries. They do not give a second thought about the importance of such documents, especially when they live paycheck to paycheck. This dilemma comes with the confusion of what they need to do with their pay stubs after their employers issue them.
&nbsp;
The next time you receive your pay stubs, instead of discarding or throwing them in a box and forgetting about them, practice keeping and documenting paycheck stubs. Save pay stubs and use them to keep track of your earnings and work hours. Check for the accuracy of the information provided every week or every pay date. Making this a habit gives you an idea of where and how much of your pay goes to taxes, deductions, benefits and verifies your income.
&nbsp;
Scan your payroll stubs to ensure that your employer does not perform a sleight of hand with your earnings.
&nbsp;
<a href="https://www.realcheckstubs.com/blog/paystubs/self-employed-pay-stub-as-a-freelance-proof-of-income" target="_blank" rel="noopener">Freelancers and self-employed individuals </a>would also benefit from keeping records of their income. They would see if their business or career is growing.&nbsp;
&nbsp;
As for employers, running a business entails keeping well-organized financial records of every transaction. Not only does this keep them compliant with the law, but pay stubs also help them monitor their salary expenses.
&nbsp;
<img src="https://www.realcheckstubs.com/storage/posts/how long to keep pay stubs.jpg" alt="Keep Track of Your Earnings and Work Hours" width="1920" height="1281" />
&nbsp;
<h3>2. Proof of Income</h3>
&nbsp;
For anyone planning to get a loan, credit, a new property, or rent an apartment, one of <a href="https://www.realcheckstubs.com/blog/paystubs/proof-of-income-everything-you-should-know-about-it" target="_blank" rel="noopener">the best ways to provide proof of income</a> is by presenting a legitimate pay stub. Banks, lenders, and other institutions could request income verification and would accept pay stubs as evidence. This gives them the confidence that you can fulfil your financial obligations towards them.
&nbsp;
If you are a self-employed individual or a freelancer, consider <a href="https://www.realcheckstubs.com/generateStubs" target="_blank" rel="noopener">using online pay stub generators such as Real Check Stubs to create a legitimate and professional-looking proof of income</a>. Income verification also comes in handy during employment negotiations, giving you a quick reference if needed.
&nbsp;
Start to save pay stubs as soon as possible and keep them for at least a year so that you could provide an income statement at any time or situation.
&nbsp;
<h3>3. Filing Taxes</h3>
&nbsp;
One important aspect of pay stubs is their use when it is that time of the year again to file for your taxes. You would want to save paycheck stubs to keep tabs on your income and taxes.
&nbsp;
As a general rule of thumb, keep and record your pay stubs for at least one year. This gives you the chance to use them as references quickly when reconciling your <a href="https://www.realcheckstubs.com/blog/paystubs/w-2-wage-and-tax-statement-form-for-small-business" target="_blank" rel="noopener">W-2 form and Social Security Contributions</a>. It makes it easier and more accurate, and you do not have to worry about inconsistencies in your filing.
&nbsp;
Even if you do not file your tax return yourself, your accountant would appreciate it that you save pay stubs. It also allows for double-checking with your accountant.
&nbsp;
Saving pay stubs is also essential for businesses when tax season comes around. This is especially true for small businesses that might not have the financial resources to hire a professional who could complete payrolls full-time. Organized financial statements and records would make everything done easier for companies.
&nbsp;
<img src="https://www.realcheckstubs.com/storage/posts/how discard paystub.jpg" alt="filing taxes" width="1920" height="1280" />
&nbsp;
<h3>4. Protection during a Tax Audit</h3>
&nbsp;
Accurate, correct, and legitimate financial records are vital to protect one's business during a tax audit. Whether you are self-employed or employed in a company, state or federal tax agencies could audit your financial records. In case you are subjected to such reviews, every pay stub you keep would support the information provided in your tax filings.
&nbsp;
The Equal Employment Opportunity Commission (EEOC) requires many companies to keep employee records such as payroll stubs. This gives companies easily accessible records when facing a complaint from an employee or a regulatory investigation.
&nbsp;
<h3>5. Identity Verification</h3>
&nbsp;
Pay stubs also come in handy when you are in a situation to verify your identity. When you are opening a bank account or getting a car loan, each pay stub contains personal details such as your social security number, and address among others. Banks would also request a copy of your most recent pay stub along with a copy of your state-issued identification card, SSN card, and other legal documents to confirm your information.
<h2>How Long Should You Keep Pay Stubs?</h2>
As stated earlier, saving pay stubs as soon as you receive them is very important. However, you also do not want to store them for too long and create a pile that would clutter your home. So, how long should you keep a pay stub? Generally, save pay stubs for at least a year. This gives you the chance to have quick references when you need them for financial obligations. Keep either a digital copy or a hard one for easier recording of a year's worth of pay stubs.
&nbsp;
If you are an employer, you could use <a href="https://www.realcheckstubs.com/" target="_blank" rel="noopener">online pay stub generators, such as Real Check Stubs</a>, to create your employees' payroll, which you could save via the cloud. Your employees would receive their pay stubs on time, and you would not have to worry about how long to keep them.
&nbsp;
As for other important documents such as your annual tax return, the IRS recommends that you keep them for at least seven years.
&nbsp;
<img src="https://www.realcheckstubs.com/storage/posts/digital pay stub copies.jpg" alt="How Long Should You Keep Pay Stubs?" width="1920" height="1280" />
<h2>Digital Pay Stub Copies</h2>
For some people, holding on to documents for more than a year would make them feel better than throwing them out. However, if you feel the need to save pay stubs for longer than necessary without worrying about papers piling up, you could always create digital copies of them.
&nbsp;
Having financial documents in digital format is a convenient way to store them without taking up to much physical space in your home.
&nbsp;
Scan or take pictures of each pay stub you receive and save them on your computer's hard drive. Digital copies also give you easy access to pay stubs whenever you need them. However, this runs the risk of your device performing slower from the accumulation of data. A solution to this is by using cloud-based storage services through the Internet.
&nbsp;
Cloud-based storage allows you to store a ton of data without your computer running slower and lets you keep your pay stubs forever. Produce a digital copy of your documents and upload them directly to Google Drive or Dropbox. Just make sure you have access to the Internet to perform this task.
<h2>How to Safely Discard Paycheck Stubs</h2>
Identity theft is a severe offence that should not be taken lightly. Someone with a bad intention could use your pay stubs to benefit themselves. Paycheck stubs contain personal and sensitive information that could be used to make fake pay stubs, so always dispose of them very carefully.
&nbsp;
In the hands of a stranger, your pay stub with your name, address, Social Security Number could cause you problems. If they use it to get loans or credit illegally, you could be flagged when applying for similar benefits.
&nbsp;
When you are ready to throw out your pay stubs, discard them properly by shredding them. This also goes with other personal financial information as they also contain your sensitive data. If you do not have a paper shredder, you could go look for businesses that provide shredding. You cut down on clutter and ensure your safety.
&nbsp;
<img src="https://www.realcheckstubs.com/storage/posts/discarding pay check stubs.jpg" alt="How to Safely Discard Paycheck Stubs" width="1920" height="1280" />
<h2>Conclusion</h2>
As essential financial documents that you should learn how long to keep pay stubs and why you should save them. Information provided by your payroll could give you plenty of benefits, such as getting loans, credits, and mortgages.
&nbsp;
<a href="https://www.realcheckstubs.com/generateStubs" target="_blank" rel="noopener">You could use pay stubs to keep track of your earnings, use them as proof of income, and verify your identity</a>. Saving a year&rsquo;s worth of payroll stubs could go a long way when you are filing taxes, reconciling your W2 form and Social Security Contributions, and when you are a subject of a tax audit by the IRS.
&nbsp;
However, holding on to documents could pile up and you may want to discard them. Consider converting your pay stubs into digital copies and saving them into the cloud. This saves you space in your home and when you do throw them out, shred them to protect you from possible fraudulent activities.

Generally, it is recommended to save pay stubs for at least a year (12 months). This allows you to have quick references when needed for financial obligations. You can choose to keep either a digital copy or a hard copy for easier record-keeping of a year's worth of pay stubs.

How long to keep pay stubs?

When you are ready to throw out your pay stubs, it is important to discard them properly by shredding them. This advice also applies to other personal financial information, as pay stubs may contain sensitive data. If you don't have a paper shredder, you can look for businesses that provide shredding services. By shredding your pay stubs, you reduce clutter and ensure your safety.

How to safely discard paycheck stubs?

Not sure how long to keep your pay stubs? Find out 5 reasons how to keep these important documents and how to safely discard paycheck stubs.

How Long Should You Keep Pay Stubs | Real Check Stubs

How Long to Keep Pay Stubs

Are you still stuck on using a Microsoft Excel payroll spreadsheet to produce and manage your employees&rsquo; pay stubs? With all the complex calculations and features of excel sheets, you would think they are useful for your accounting needs. However, are they really essential and efficient to generate your company&rsquo;s payroll?
&nbsp;
Creating pay stubs requires numerous processes and steps to accomplish, such as researching current state and local labor laws, various calculations of taxes, benefits, net, and gross pay, and submission of reports to government entities. These items alone should give you an idea of how time-consuming and difficult using excel sheets is for you.
&nbsp;
This article discusses the differences between an online stub generator and a pay stub template excel and why you should switch to an automated check stub.
<h2>Advantages of Check Stub Generators</h2>
Completing more work in less time would greatly help your company or business expand and grow fast and steady. Efficiently working means fulfilling intricate tasks such as creating pay stubs and payrolls without delay.
&nbsp;
Here are some advantages of using check stub generators to increase productivity and make your job easier.
<h3>1. Eliminates Errors and More Accurate Than an Excel Payroll Template&nbsp;</h3>
Compared to a Microsoft excel payroll template, online pay stub generators leave little room for error, giving more accurate information. Creating an excel pay stub using a spreadsheet requires you to input all information one by one every pay date and device your equations to <a href="https://www.realcheckstubs.com/blog/paystubs/gross-pay-vs-net-pay-on-a-pay-stub-what-the-difference" target="_blank" rel="noopener">calculate gross pay, net pay</a>, and deductibles. This always gives way to human error, which could eat precious time as you fix the problems.
&nbsp;
Check stub generators provide you with automatic calculations, removing human error commonly found on pay stub template excel. You just need to input basic information such as employee wage and hours worked, and the generator would do the rest. <a href="https://www.realcheckstubs.com/blog/paystubs/employee-pay-stub-online-salary-slip-maker" target="_blank" rel="noopener">Online payslip creators</a> are also up to date on current tax and deduction requirements, meaning you do not need to worry about forgetting to change these data periodically.
<h3>2. Better and More Accessible Record Keeping</h3>
Looking into hundreds of xlsx files to look for an employee&rsquo;s pay stub record could take a lot of time and effort, which you could have spent on other more critical tasks. An online payslip generator automatically saves and archives each pay stub into an easy-to-access record system stored in cloud storage.
&nbsp;
As opposed to creating a payslip excel file, which accumulates and takes up memory in your computer, check stub generators allow you to streamline your administrative tasks. You can easily create individual personnel files and access and retrieve previous pay stubs whenever you need them.
<h3>3. Online Generators Provide A More Professional Look</h3>
Using an online paycheck generator would <a href="https://www.realcheckstubs.com/blog/paystub-generator/high-quality-professional-paycheck-stub-maker">provide a more professional image</a> than a paycheck template excel. Unlike using a spreadsheet, you could easily customize and save various online pay stub templates, saving you time and effort.
&nbsp;
This also makes your business look more legitimate not only in image but also structurally. Your ledgers and files would look more polished, smart, and sleek.
<h3>4. User-Friendly and Faster to Use Than A Payslip Excel Template</h3>
Compared to a check stub template excel file, which could be very confusing with all its functions and commands, online pay stub creators are more straightforward and easier to use. As a busy business owner, check stub generators only need you to enter the necessary information and, thanks to its automatic calculator, dramatically simplifies the process.
&nbsp;
There are fillable Microsoft excel pay stubs ready for download online. However, they still do not provide you with the convenience of an automatic online paycheck stub template. These payslip excel sheets only give you a format that you still need to fill individually for each employee.
&nbsp;
&nbsp;
<h3>5. Greater Company Transparency</h3>
Another advantage of using an online paycheck stub generator is that it creates trust between you and your employees. Using <a href="https://www.realcheckstubs.com/" target="_blank" rel="noopener">Real Check Stubs</a> allows your staff and workers to instantly access the information online, promoting a better working atmosphere. Compared to a paycheck stub template excel spreadsheet, which could easily be edited, online paystubs are more secure once they are created.
&nbsp;
Your employees could easily view and review their payroll if they are paid correctly and check if the right amount is presented for their allowances or deductions. By using online software, the management and employees would quickly get updated with payroll expenses based on generated pay stubs.
<h3>6. Fewer Expenses Overall versus Payroll Check Template Excel Spreadheet</h3>
Time is a precious resource, and for business owners, this is especially true. Every minute spent on creating payslips using Microsoft excel spreadsheets could mean money out of your pocket. Real Check Stubs&rsquo; online templates ensure that you take less time, effort, and money to generate employee earnings with automatic calculators and fillable information input.
&nbsp;
Overall, online generators are more inexpensive with definite advantages over using pay stub generator excel sheets. You could easily find an employee using their employee code and instantly send them their pay stub instead of the traditional mailing paycheck stubs method. After switching to online check stub generators, you would never look back again.
<h2>Why Are Excel Pay Stubs Out-of-Date?</h2>
Since Microsoft&rsquo;s creation of the excel spreadsheet, businesses jumped on the opportunity to upgrade their employee management from manually writing or typing payslips. If you think about it, an excel pay stub is an excellent tool with many useful programmable functions. However, as handy as it may seem, it is still time consuming and confusing, especially for beginners.
&nbsp;
Now, advances in technology brought powerful software that could automate administrative tasks such as <a href="https://www.realcheckstubs.com/blog/payroll/best-payroll-advice-for-small-businesses" target="_blank" rel="noopener">creating payrolls</a>. These online check stub creators do not take much skill to operate compared to using an excel pay stub template.
&nbsp;
With an ever-changing and fast-paced work environment, time is money. Using an excel pay stub quickly becomes obsolete, with companies and businesses switching to online software to save on costs.
&nbsp;
&nbsp;
<h2>7 Reasons to Shift to Online Check Stub Generators</h2>
Here are a few reasons for you to consider doing away with using payslip excel spreadsheets and convert to online generators:
<h3>1. Volume</h3>
As your business expands and grows, the number of transactions and employees increases. This means the number of check stubs you need to produce also increases. The volume of various data would make accounting difficult when using excel sheets.
<h3>2. Tabs Everywhere&nbsp;</h3>
The number of tabs you need to keep in a single file could become overwhelming, especially when they are not correctly linked. This develops into a web that could snap with one wrong data entry.
<h3>3. Record Keeping</h3>
It is hard to keep a record of your transactions, particularly when you need to use multiple names for xlsx file types. Worst, you could lose track of the name assignment and need to view each file just to fix the issue.
<h3>4. Training</h3>
Hiring and training staff to create your payroll pose a difficulty as excel spreadsheets require specific steps and input to become effective. You would also need to retrain them periodically to keep them updated with new information.
<h3>5. Risky Integration</h3>
The risk of error increases, especially when check stub template excel sheets cannot be integrated with online tools, such as accounting software.
<h3>6. No Automation</h3>
Spreadsheets depend on manual operation to fully realize their capabilities. They do not have automation features such as maintaining statutory compliance for employee tax rates and benefits. This means that you need to keep yourself updated with any change to tax laws and input the new information.
&nbsp;
You would also need to create formulas that would calculate entries in a payslip excel, which involves a lot of copy-pasting. Using an excel sheet opens your business to vulnerabilities, especially when preparing payrolls and filing tax returns.
<h3>7. Data Complexity</h3>
With all the data necessary to generate payroll, check stub template excel sheets could make your job even more complicated. As your business grows so does the number of your employees. This would add more complexity as you would need to keep up with number formats, data compiling, and system integration. Do this wrong and it could throw your business into disarray.
&nbsp;
As stated earlier, online templates provide plenty of benefits compared to payroll check template excel sheets. These advantages alone should be enough for you to upgrade your business without a shadow of a doubt.
&nbsp;
Additionally, as an employer, you need to create precise pay stubs, and shifting to online check stub generators could greatly help.
<h2>Conclusion</h2>
As the saying goes, &ldquo;time is gold,&rdquo; and when you&rsquo;re running a business, this means everything. Improving your efficiency with online check stub generators is one of the most remarkable ways to save time and cut down on administrative costs. The advantages of using automated software instead of a pay stub template excel spreadsheet greatly outweigh the disadvantages, if there are even any.
&nbsp;
So what are you waiting for? Check out<a href="https://www.realcheckstubs.com/generateStubs" target="_blank" rel="noopener">paystub generator</a> from Real Check Stubs and feel the power of automation. Also review our <a href="https://www.realcheckstubs.com/blog/paystubs/pay-stub-examples-from-real-check-stubs-generator" target="_blank" rel="noopener">paystub examples</a>

Since Microsoft’s creation of the excel spreadsheet, businesses jumped on the opportunity to upgrade their employee management from manually writing or typing payslips. If you think about it, an excel pay stub is an excellent tool with many useful programmable functions. However, as handy as it may seem, it is still time-consuming and confusing, especially for beginners.

Why Are Excel Pay Stubs Out-of-Date?

Compare the differences between an online paystub generator and using an excel template to create your paystub. Explore the easiest and most accurate way.

Online Stub Generator vs Payroll Template Excel

Online Stub Generator vs Pay Stub Template Excel

A pay stub generator with an overtime statement allows you to type in known quantities that would calculate the rest. Real Check Stubs provides various advanced stubs with detailed entries that would make your job easier.
&nbsp;
Simply fill in all information required for each pay stub and instantly create your own check stubs with overtime. The pay stub calculator with overtime does all the hard work and generates a link to download and print your paycheck stubs.
&nbsp;
There are 4 pay stub templates available with the overtime feature in Real Check Stubs. Each would give you the benefit of making and using easily customizable check stubs.
&nbsp;
<h2>How Check Stubs With Overtime Work</h2>
First, let us dig into what overtime is and how to calculate it to give you an understanding of how it works. Yes, the advanced pay stub maker with overtime already does the calculating for you but knowing what the entry is would tell you why it matters.
<h3>Overtime Pay For Hourly Employees</h3>
If your employee works for more than 40 hours a week, as required by the Fair Labor Standards Act, the additional hours are referred to as overtime. Overtime compensation is rated at a federal minimum of one and a half times more than regular hours and given to hourly employees every pay date.
&nbsp;
For example, if an hourly employee works for 46 hours in a week for $12 an hour, your check stub maker with overtime should reflect $18 an hour for 6 hours of overtime. The additional pay should be given on the following pay date.
<h3>Overtime Pay for Salaried Employees</h3>
For salaried employees, if their weekly income is over a specific amount, they are usually exempt from overtime. However, if they are below the amount specified by federal regulations, they would receive overtime pay computed per hourly basis. You could calculate a salaried employee's hourly rate for overtime by dividing their total hours per week or year by their total pay they should receive for that week or year.
&nbsp;
Having an idea of what overtime is, allows you to enter values in the pay stub creator with overtime accurately, leaving no room for error. Regulations for overtime and other labor laws vary depending on which state you are in. They could be more restrictive or exceed those of the federal government, so familiarize yourself with state laws to better grasp what you need to pay.
&nbsp;
Paying your employees the right overtime pay would let them know that you value their time and effort. It would also give them the confidence to work diligently and honestly.
<h2>Pay Stub With Overtime Templates</h2>
There are four pay stub templates with overtime features in Real Check Stubs' broad array of template options.
&nbsp;
<h3>Advanced Pay Stub Template 1</h3>
&nbsp;
The first advanced&nbsp;<a href="https://www.realcheckstubs.com/advanced" target="_blank" rel="noopener">pay stub creator with an overtime template</a> summarizes all necessary information needed to produce an effective check stub.
&nbsp;
<img src="https://www.realcheckstubs.com/storage/posts/pay stub with overtime advanced template 1.png" alt="Advanced Pay Stub Template with overtime" width="1792" height="1260" />
&nbsp;
The heading includes your company name, company address, pay period, pay date, employee details such as their name, address, identification number, and social security number.
&nbsp;
The lower half of the check stub generator with overtime is divided into columns, with the first part containing the breakdown for your employee's gross pay. The first column in the category describes each item, such as regular, overtime, holiday, vacation, bonus, and commission. Next, the second column provides the exact hourly rate for each item, the total hours your employees worked, and the total amount per item in the pay period.
&nbsp;
The second half of the lower part includes deductions and taxes subtracted from the gross income to get the employee's net income. The pay stub generator with overtime also includes year-to-date (YTD) details for all items.
&nbsp;
<h3>Advanced Pay Stub Template 2</h3>
&nbsp;
The second advanced&nbsp;<a href="https://www.realcheckstubs.com/advanced2" target="_blank" rel="noopener">pay stub maker with an overtime template</a> resembles the first template with the heading containing the information for both employer and employee. The second half also contains the same information. However, the columns are divided by thick lines, making the columns more prominent and more comfortable to follow.
&nbsp;
<img src="https://www.realcheckstubs.com/storage/posts/check stub with overtime template 2.png" alt="Advanced Pay Stub Template 2 with overtime" width="1584" height="1328" />
&nbsp;
<h3>&nbsp;Advanced Pay Stub Template 3</h3>
&nbsp;
<a href="https://www.realcheckstubs.com/advanced3" target="_blank" rel="noopener">The advanced paystub template 3 for the check stub maker with overtime</a> now includes a bar code at the top left and a new format.
&nbsp;
<img src="https://www.realcheckstubs.com/storage/posts/pay stub maker with overtime.png" alt="Advanced Pay Stub Template 3 with overtime" width="1364" height="1326" />
&nbsp;
The pay stub is divided into two vertical halves. The first half contains all details about the gross and net pay, such as regular and overtime hourly rates, federal and state taxes, and other deductibles applicable or required by law.
&nbsp;
The second half includes <a href="https://www.realcheckstubs.com/blog/paystubs/pay-cycle-pay-day-pay-period-whats-the-difference-between-them">the pay period, pay date, </a>employer's notes, and the<a href="https://www.realcheckstubs.com/blog/paystubs/paystub-generator-with-year-to-date-ytd"> total year-to-date (YTD) amounts</a> itemized in a table.
&nbsp;
<h3>Advanced Pay Stub Template 4</h3>
&nbsp;
<a href="https://www.realcheckstubs.com/advanced5" target="_blank" rel="noopener">The last template to make check stubs with overtime</a> uses a smaller format, requiring less paper for printing. It gives out all employer and employee details in boxes in the top half while itemizing the amounts, such as regular pay, overtime pay, social security tax, and medicare, needed to calculate workers' gross and net incomes.
&nbsp;
<img src="https://www.realcheckstubs.com/storage/posts/pay slip maker with overtime.png" alt="Advanced Pay Stub Template with overtime 4" width="1996" height="792" />
&nbsp;
<h2>Conclusion</h2>
Real Check Stubs' pay stub generator with an overtime feature allows you to create effective payslips that provide your employees with the proper breakdown of their income. Paying the correct compensation for overtime would earn your workers' trust and give them the confidence to work. Using an advanced check stub maker with overtime templates would make paying salaried and hourly employees as easy as it could get.

Simply fill in all information required for each pay stub and instantly create your own check stubs with overtime. The generator will calculate the rest.

Paystub Generator With Overtime | Real Check Stubs

Pay Stub Generator With Overtime

Paystubs can often be confusing, with a lot of acronyms with seemingly random amounts after them. In this blog, we will help you understand what YTD means on a pay stub and why it's so important.
This kind of understanding of commonly used financial terms will help you gain a real understanding of your finances and help you plan for long-term financial security.
An easy way to calculate your YTD is by using a <a href="https://www.realcheckstubs.com/generateStubs" target="_blank" rel="noopener">pay stub generator with year-to-date</a>, such as Real Check Stubs. This online creator can definitely make your job more comfortable when it comes to computing and entering data.
&nbsp;
<h2>YTD Meaning</h2>
YTD stands for &lsquo;year to date&rsquo; in finance. So, YTD meaning payslip is a summary of earnings and deductions from the start of the fiscal year to the date of the paycheck.
It tells you how much exactly you have earned and how much has been deducted from your wages in the current year.&nbsp;
&nbsp;
<img src="https://www.realcheckstubs.com/storage/posts/realcheckstubs.com - year-to-date paystub creator.png" alt="YTD meaning payslip , year to date pay stub" width="1792" height="912" />
As you can see, there could be more than one YTD number. Here are what 3 different YTD numbers specifically refer to.
<h3>YTD gross earnings</h3>
YTD gross earnings refers to the total amount you have earned from January 1st until the current date. This figure includes not only your salary or hourly wages, but any additional income such as bonuses, overtime, commissions, or any other monetary compensation you have received from working at your job. This figure does not include any deductions, hence &lsquo;<a href="https://www.realcheckstubs.com/blog/paystubs/what-are-gross-wages" target="_blank" rel="noopener">gross earnings</a>&rsquo;.
&nbsp;
<h3>YTD deductions</h3>
YTD deductions are the amount deducted from your paycheck to cover taxes and other similar contributions that are taken from your paycheck. This could include state and federal income taxes, health insurance contributions, <a href="https://www.realcheckstubs.com/blog/paystubs/what-is-fica-on-my-paystub" target="_blank" rel="noopener">FICA </a>/ Medicare, and any other deductions that come out of your paycheck. So the YTD figure tells you your total deductions for the year to date.
&nbsp;
<h3>YTD net pay</h3>
As you may have guessed, YTD net pay is your total net earnings from January 1st to the current date. This is your gross earnings minus your deductions and reflects the amount of money that actually hits your bank account. You might also see &lsquo;YTD hours&rsquo; on your pay stub, which as you can imagine, gives you the amount of hours you have worked so far in the current year.
&nbsp;
<h2>Why YTD numbers are important to employers?</h2>
Employers need to know exactly what they have paid out to employees and how much has gone towards tax or other deductions throughout the year. YTD data helps employers figure out what they have to pay in taxes to remain compliant with federal and state laws.
YTD figures also help employers calculate their potential profits and losses, budget effectively, see financial trends, and get a clear picture of the business's performance. There are some kinds of YTD figures that are for employers:
&nbsp;
<h3>YTD returns</h3>
This shows the employer how much profit has been generated by a particular investment since the start of the current year. This can help when evaluating the value of a portfolio or investment performance to see if it is worth having. A simple calculation can give you this number - just subtract the value of the investment on January 1st from its current value, then divide the difference by the first-day value. Multiply this figure by 100 to see this figure as a percentage.
&nbsp;
<h3>YTD gross earnings</h3>
This of course refers to the turnover or gross profit of a business before any outgoings have been accounted for. This is the amount made by the business from January 1st to the current date. While it's not a clear picture of profits, as there are many deductions to be taken out before the business can see profit, it's still an important figure to have.
&nbsp;
<h3>YTD payroll</h3>
This is the amount that a business has paid out to its employees in the current year. This could also include money paid out to freelancers or independent contractors. YTD payroll is important to know when calculating the net profits of a business and also for tax purposes.
&nbsp;
<h2>Why employees need to know their YTD pay?</h2>
Every time you pay an employee, you should provide a pay stub that reflects their gross and net wages, taxes, deductions, and YTD information.
<h3>Tax Obligations</h3>
YTD figures help employees to work out how much they should be paying in taxes, and if too much or too little is being deducted from their paycheck. This is also important when filling out your W-4 form for the year. Filling this form in correctly ensures that you and your employer are both compliant with tax laws.
&nbsp;
<h3>Employee Compensation</h3>
YTD earnings can give a clear picture of an employee&rsquo;s finances and allow them to monitor their income and make short and long-term plans for financial security. Keeping track of YTD earnings helps employees budget effectively, build up a savings account, and manage their overall finances.
&nbsp;
<h3>Monitoring Benefits and Retirement Contributions</h3>
YTD information gives employees helpful insights into their contributions to health insurance plans, FSA/HSA, retirement funds, IRAs, and 401ks. It gives an idea of exactly how much is being dedicated to these things and also how much they should be contributing. This is important when making long-term financial plans or retirement goals.
Employees can view their year-to-date payroll income through a physical or&nbsp;<a href="https://www.realcheckstubs.com/blog/paystubs/ultimate-guide-to-e-pay-stubs" target="_blank" rel="noopener">digital pay stub&nbsp;</a>you decide to issue. As an employer, you should practice providing a pay slip every time your pay date comes along. This would give them a breakdown of their earnings, as well as boost their confidence.
<h2>Year-To-Date Earnings Templates</h2>
Here are some simple ways of calculating various YTD figures.
<img src="https://www.realcheckstubs.com/storage/posts/ytd check maker - realcheckstubs.png" alt="Year-To-Date Earnings Template" width="1836" height="940" />
<h3>YTD Formula and Earning Calculations for Employees</h3>
To work out what your gross earnings should be for the year to date, start by dividing your yearly salary by 12. Then take this figure and multiply it by how many months have gone by.
As a YTD calculation example, if your salary is $85k per year, your monthly gross earnings are $7083. If the month is September, then your YTD gross earnings (not including bonuses or any other monetary compensation) is $63,747.
<h4>YTD Formula for Annual Salary</h4>
<blockquote>
YTD earnings = (yearly salary / 12) x how many months into the year
</blockquote>
<h4>YTD Formula for Hourly Wage</h4>
If you are on an hourly wage rather than a yearly salary, the formula is:
&nbsp;
<blockquote>
YTD earnings = (Hourly wage x hours worked in a month) x how many months into the year
</blockquote>
&nbsp;
<h3>YTD growth calculations for businesses</h3>
Business calculations for YTD figures can be more complicated. Interest or yield values are often expressed as percentages rather than a number. This is helpful though, as month-to-month profits and yields can fluctuate so working out a percentage over the year so far is an effective way of analyzing success. Try the below formula for working out the percentage of return on an investment:
&nbsp;
<blockquote>
Year to date = ((Current value - Beginning value) / Beginning value) * 100
</blockquote>
Calculating your company&rsquo;s year-to-date payroll involves gathering each of your employees&rsquo; year-to-date pay stub and adding them to each other. &nbsp; For example, you have five employees currently working in your company, namely, Michelle, Ada, Mia, Chris, and Van. Michelle earned a total of $40,000 in gross income YTD, while Ada earned $36,000, Mia earned $42,000, Chris earned $28,000 and Van earned $47,000. Add up all five year-to-date check stubs, and you would get a total of $193,000 for this year&rsquo;s payroll.
<h2>The importance of keeping track of your Year-To-Date amount</h2>
It's important to understand the YTD figures on your pay stub if you want to effectively manage your finances. Whether you are an employee or an employer, YTD numbers help give a clear idea of your finances and allow you to make short and long-term financial plans.
You can also spot any errors that could cause problems in the future for earnings or tax deductions. Comparing your YTD figures year on year can give you invaluable information for predicting future income. By understanding YTD, you can take control of your finances and your future will be more secure.
&nbsp;
Need assistance with your Year-to-Date pay stubs? Explore our instant <a href="https://www.realcheckstubs.com/generateStubs" target="_blank" rel="noopener">pay stub generator</a>, complete with professional pay stub templates, to simplify your payroll processing today!

The year-to-date payroll lets an employee or a business owner know how much they earned from the start of the year to the current date. YTD allows employers to compare payroll expenses versus the total annual budget for those costs. It sets an earnings benchmark for people to base their taxes on.

Why Is Year-To-Date In Payroll Important?

Year-to-date pay stubs give you a clear understanding of whether your company or business is on the right path to meeting its projected results. It tracks the amount of money a person received and is trying to save for the year.

What is the importance of year-to-date pay stubs?

Discover the YTD meaning on paystub, YTD calculations, formula, and importance and use paystub generator with year to date for long-term financial security.

YTD Meaning Pay Stub, Formula, Calculation and Examples

Paystub Generator With Year-to-Date (YTD)

As a freelancer, have you ever tried to request a loan from a bank only to be turned away because you could not provide proof of income?
Being your own boss certainly comes with many advantages as you only answer to yourself, you could pick your schedule, and you are no one's employee. However, you may wonder <a href="https://www.realcheckstubs.com/blog/paystub/how-to-get-check-stub">how to create pay stubs if self-employed</a>, given that no employer would give you one.
This article would not only help you know the ins and outs of paycheck stubs for self-employed but also teach you how to make them. So read on and take advantage!
<h2>What Are Self-Employment Pay Stubs?</h2>
If your employment status is self-employed and you are new to self-employed pay stubs, making one could become confusing and tedious. Though, as you go along your journey to becoming a successful freelancer, a paycheck stub for self-employed would go a long way.
For a freelancer or the self-employed, payment generally comes either in a paycheck or in cash. If you want to request a bank loan or any loan, pay stubs are one of the important documents to have. Presenting your paycheck would not help either and most likely guarantee that you would be turned away.
&nbsp;
Most of the time, banks would request a breakdown of your income for them to base your loan on. This is where self-employment pay stubs come in very useful.
&nbsp;
One of the best ways to<a href="https://www.realcheckstubs.com/blog/paystubs/proof-of-income-everything-you-should-know-about-it" target="_blank" rel="noopener"> provide proof of your income</a> is through a pay stub, especially for self-employed people. If you are doing a freelance job, and you want to get a car loan, self-employment pay stubs are the way to go for providing your income statement.
&nbsp;
Pay stubs will help banks and other lenders determine if you are earning enough and capable of paying them. They document all details of someone's income from gross pay to net pay, including all information on taxes, deductions, benefits, and additions. They act as paycheck proof, summarizing the totality of how much you take home.
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<img src="https://www.realcheckstubs.com/storage/posts/realcheckstubs.com - employee paystub.jpg" alt="What Are Self-Employment Pay Stubs?" width="1920" height="1280" />
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Generally, employers give paycheck stubs to their employees as income statements, and usually, your clients do not have pay stubs to give. However, it is still possible for you to create a self-employment stub yourself.
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Making your own template would give you more freedom when it comes to customization. You would be able to put more detail and information into your payslip.
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Additionally, when it comes to filing your taxes, entering the correct information would become more manageable.
<h2>Advantages of Check Stubs for Self-Employed</h2>
You could consider a self-employed earnings statement, along with pay stub generators, as a tool for your accounting needs. Freelancers and self-employed people such as lawyers, doctors, and other professionals would sometimes hire staff such as secretaries and receptionists, so creating pay stubs becomes a crucial part of the business.
<h3>Proof of Income</h3>
As stated earlier, when taking out a loan for a car or house from a bank, one of the best ways to provide proof of income is through a pay stub. Self-employed check stubs would provide lenders details of your cash flow because they would want to know if you have cash left at the end of the month. Although it may seem personal, pay stubs would verify that you are financially capable of paying loans or rents.
<h3>Show Profit and Loss Statements</h3>
As with any business, it is best to keep track of your income and business expenses. Pay stubs would make your job easier, faster, and more accurate when accounting for your cash flow. You would also see your progress as you grow. However, as you are the boss, you should be honest with the information you insert in the statement.
<h3>Keep Track of Invoices and Contracts</h3>
Pay stubs for self-employed people also act as a record of invoices and contracts between clients and customers. They keep you updated with your taxes and contributions, and sources of your income. Online check stub generators could store all records in cloud storage, giving you access to data anytime you need them.
<h3>Paystub Generator for Self-Employed Boosts Productivity</h3>
Using a pay stub generator would significantly increase the speed of accounting your money, making it easier to perform and less tedious. Online generators, such as <a href="https://www.realcheckstubs.com/generateStubs" target="_blank" rel="noopener">Real Check Stubs</a>, saves you time using pay stub templates with customizable information. You simply input the necessary data, and it automatically calculates your taxes and net income.&nbsp;
<h3>Filing Your Tax</h3>
At times, to acquire a loan, banks require you to provide them with your latest tax returns. The details of your taxable income would tell lenders if you have enough money to get a loan. If you lower your taxable income for some instance, banks will not approve the loan, as it would reflect that you do not have enough money.
Some freelancers preserve their income by reducing the taxable amount. However, this practice would lead to lower loanable amounts too.
Understanding how to create pay stubs would make filing taxes faster and easier and <a href="https://www.realcheckstubs.com/blog/paystubs/top-13-small-business-accounting-advice-to-save-your-money" target="_blank" rel="noopener">save you fees from hiring an accountant</a>.
<h3>Professionalism</h3>
Using a self-employed pay stub generator creates a professional atmosphere in your work, making you more reliable and trustworthy. Pay stub services to save you time, money, and effort while enjoying the benefits of having instant access to all files. Pay stub generators also create official documents for when you get paid for your services.&nbsp;
<h2>How To Make Pay Stubs if Self-Employed?</h2>
Creating pay stubs is not that difficult of a process. However, you would need to pay close attention to all details, as they are considered legal documents.&nbsp;
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Every pay period, employees receive pay stubs from their employers. As for freelancers and self-employed, they would need to make it themselves. If you are paid on a project basis or have a contract that lasts for months, make a pay stub every time you get paid.
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<img src="https://www.realcheckstubs.com/storage/posts/realcheckstubs.com - employer pay slip.jpg" />
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You could <a href="https://www.realcheckstubs.com/blog/paystub-generator/online-stub-generator-vs-pay-stub-template-excel" target="_blank" rel="noopener">use a spreadsheet to make your pay stub template </a>after every project or contract, inputting all calculations before beginning. Alternatively, you could use self-employed pay stub generators, such as RealCheckStubs, to generate your pay stubs for you.
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Online generators provide a more convenient experience, as they provide formatted templates, provide you with what information is needed, and automatically calculate results.
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The following are the information you would typically find in any template format provided by <a href="https://www.realcheckstubs.com/blog/paystub/everything-you-need-to-know-about-using-a-free-check-stub-maker-online" target="_blank" rel="noopener">online pay stub generators</a>.
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<h3>Gross Income/Pay</h3>
Your gross income or pay is how much a client or customer owes you after a project or a contract before taking out any deduction. This is your base income and the basis for all subsequent computations. You could easily <a href="https://www.realcheckstubs.com/blog/paystubs/how-to-calculate-adjusted-gross-income-from-pay-stub">calculate your gross income</a> by dividing your annual salary by the number of times you received payment. 
So if you are paid on a monthly basis, divide your annual salary by twelve. Keep in mind that for this part, you would need to ignore money taken out for taxes.
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<h3>Taxes and Deductions</h3>
Taxes and deductions are anything taken out of your gross income, such as contributions, benefits, local and state taxes, and Social Security Taxes. You could also refer to the IRS Employer's Tax Guide for a more in-depth and updated list and descriptions of all applicable taxes you would need to pay as a freelancer or self-employed.
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Just like regular employees, the earning statement for self-employed shows that your company pays you regularly, which means all necessary taxes are withheld from each paycheck. Withholding amounts keep you aware of all taxes owed at year&rsquo;s end. It is better to withhold from each paycheck than to make up estimated quarterly payments or lump sums during tax filing.
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<h3>Net Income/Pay</h3>
You can derive your net income from subtracting all applicable taxes, deductions, contributions, and other necessary charges to your gross income. Fortunately, self-employed pay stubs generators could do this function automatically and accurately. You just need to make sure to input all information correctly.
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Net income is the amount you find at the last entry in your self-employed pay stub.
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If you are the only employee in your company, you may still want to create a payroll system to issue self-employed check stubs to yourself. Meanwhile, if you have employees under your payroll system, then you could add yourself to the system. Doing this establishes your pay rate and withholding information.
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You may also opt for payroll services where bank affiliates, bookkeepers, and accountants issue your check stubs.
<a href="https://www.realcheckstubs.com/blog/paystubs/gross-pay-vs-net-pay-on-a-pay-stub-what-the-difference">Gross Pay vs Net Pay On Pay Stub - What's The Difference?&nbsp;</a>
<h2>Conclusion</h2>
Freelancers and self-employed range from architects, lawyers, and doctors. They enjoy the many advantages of being their own boss. However, even self-employed have to take responsibilities such as providing proof of income for loans and filing for taxes. This is where a self-employed pay stub generator could greatly help provide official documents for payments towards their services.

As a freelancer, it can be challenging to prove your income when request a loan from a bank. Find out how self-employed pay stubs can be used as proof of income

Proof of Income For Freelancers: Self-Employed Pay Stub

Self-Employed Pay Stub as a Freelance Proof of Income

Real Check Stubs' flexible system allows you to <a href="https://www.realcheckstubs.com/blog/paystubs/why-you-should-customize-your-paycheck-stubs">customize your paystubs </a>to fit your needs.
<h2>Explore Customizable Options&nbsp;</h2>
You can customize:
<ul>
<li>specific date ranges,</li>
<li>types of pay (hourly, salary, contractor),</li>
<li>types of employment,</li>
<li>deposit slips,</li>
<li>background on stubs,</li>
<li>company abbreviation and a lot more.</li>
</ul>
Your paycheck stub should be unique to you and should reflect the details of your situation. We have and will continue to make improvements to assist you in your journey to the perfect paycheck stub.
It's ridiculous how passionate we are about paycheck stubs and how much attention to detail we give when it comes to stubs.
If you have a suggestion for a new improvement please leave it in the comment section.

Do you want to customize your paycheck stub? Then, explore 16 different templates of Real Check Stubs and make your stub unique by one of them.

Customize Your Paystub | Real Check Stubs

Customizable Options

There are times as an entrepreneur or business owner you may need to record your income or provide a worker with a record and detailed breakdown of their paycheck.
It's important to understand the different deductions that may be required if you have not yet completed those calculations, it is also important to have a clear understanding of how these deductions may come into play.
You could simply write these on a piece of paper. However, we know that is not the professional way and does not convey the best represent you and all the hard work you have put into your company.
<h2>Professional Check Stub Maker</h2>
<a href="https://www.realcheckstubs.com/blog/paystub-generator/the-best-paystub-generator">Real Check Stubs</a> is here for you. It's important that your company is seen as professional by your workers and the world.
Real Check stubs provide high-quality professional paycheck stubs that give you the option of listing deductions or simply <a href="https://www.realcheckstubs.com/blog/paystubs/gross-pay-vs-net-pay-on-a-pay-stub-what-the-difference">the gross pay. </a>
You also have several configuration options and 16 templates to select from. When printed the high quality is immediately apparent.

Here's your chance to review the various paystub templates our pacyheck stub generator makes. Discover why we are known as the go to place for real paystubs.

Create Your Paystub with Our High-Quality Check Stub Maker

High Quality Professional Paycheck Stub Maker

As a <a href="https://www.realcheckstubs.com/blog/payroll/best-payroll-advice-for-small-businesses" target="_blank" rel="noopener">small business owner or contractor</a>, you have probably experienced the frustration of paperwork and payroll.
Your staff needs documentation to prove they have been paid and most payroll companies require you to jump through hoops you couldn't dream of.
There has to be an easier way to handle payroll. Contractors are paid in cash in most cases, how should that be handled, who keeps the records?
<h2>Real Paycheck Stub</h2>
How do you provide them with a real paycheck stub? You have questions and we have answers! Our real paycheck stub system allows you as a business professional to create real paycheck stubs to provide your staff with instantly.
This is important to them when they need to provide proof of income or keep records of pay.
<h2>Create Your Stub in Minutes</h2>
Simply entering your business information and basic employee information is all that is needed. Paycheck stubs are delivered instantly after purchase and a backup copy is also sent to your email address.
The paystubs are provided in pdf format for your convenience. Ultimately the pdf format means that the stubs can be viewed on a mobile device as well as virtually any smartphone, tablet, or computer in the world!
You're smart and know you only want to provide your staff with the best documents available.
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Other articles you may be interested in:
<a href="https://www.realcheckstubs.com/blog/paystubs/employee-pay-stub-online-salary-slip-maker">Business Slip Makers</a>
<a href="https://www.realcheckstubs.com/blog/paystubs/ultimate-guide-to-pay-stubs">Guide to Paystubs</a>

The ultimate guide on everything proof of income.  You should be informed when making a paystub and this guide will tell you how.

Make a Real Pay Stub in 1 Minute

Real Paycheck Stubs

Creating accurate and real stubs have never been so easy. Real Check Stubs ensures the calculations are accurate and that you can make a paycheck stub quickly and simply.
<h2>5 quick steps to make a paycheck stub</h2>
Follow these directions to make a paycheck stub and download it instantly:
<ol>
<li>Select a paycheck stub template that fits your needs.</li>
<li>Enter your company and payee information on the paycheck stub</li>
<li>Determine if the payee is a contractor or employee.</li>
<li>Enter the payee's pay rate or salary information.</li>
<li>Select the paydate and download your paycheck stubs.</li>
</ol>
&nbsp;
A Few other articles that you may find useful:
<ul>
<li><a href="https://www.realcheckstubs.com/blog/paystubs/3-steps-how-to-make-check-stubs-online" target="_blank" rel="noopener">3 steps to make a paycheck stub</a></li>
<li><a href="https://www.realcheckstubs.com/blog/paystubs/can-you-create-a-pay-stub-for-yourself" target="_blank" rel="noopener">How to create a paystub</a></li>
<li><a href="https://www.realcheckstubs.com/blog/paystubs/ultimate-guide-to-pay-stubs" target="_blank" rel="noopener">Ultimate Paystub guide</a></li>
<li><a href="https://www.realcheckstubs.com/blog/paystubs/how-to-make-a-pay-stub" target="_blank" rel="noopener">How to make a paystub</a></li>
<li><a href="https://www.realcheckstubs.com/blog/w-2-form/how-to-calculate-agi-adjusted-gross-income-from-w-2">How to calculate AGI</a></li>
</ul>

Learn quick and easy steps to make a paycheck stub with our guide. Create an error-free stub in minutes and ensure your financial records are accurate.

5 Quick Steps to Make a Paycheck Stub

How to make a Paycheck Stub

Cinth

Very easy to use and professional done.  The customer service is excellent.

Brian

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Owner

Angel

I'm a freelance web developer and marketing expert. the check stub yall provided was so easy it did all the math for my state with regards to monies paid for Medicare taxes etc and it got my loan approved for an unsecure loan with my bank. So thank you so much if you need pay stubs for a loan these will do the tricl easy peasy.

got my loan approved

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I’ve tried other services similar to this one, but this one is the greatest one on the market because they are so authentic looking thanks. I use them all the time for three years now.

Cynthia Bullock

Service was excellent, fast 
And great. Thank you

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Tag: make a payroll stub