HOW TO MAKE CHECK STUBS: A Detailed Step-by-Step Guide

Check stubs are essential parts of an employee’s financial record. It provides a breakdown of earnings, deductions, and other important information. This article will explain what a check stub is, its purposes, including proof of income, record keeping, tax purposes, and legal obligations and how to make one, from gathering the necessary information such as personal and check information, earnings, deductions, withholdings, company information, pay period, net pay, and year-to-date information, to selecting the right template and filling in the details. Additionally, it lists free online tools you can use to make check stubs for your business and employees.

What are Check Stubs?

A check stub, also called a pay stub, is a piece of paper that comes with a paycheck and shows how much an employee was paid for a certain period. It lists the wages gained, taxes paid, and other deductions from an employee’s pay. In the end, it shows the employee’s net pay.

Paycheck stubs are crucial documents for individuals and companies, helping employees track their pay and understand deductions. Employers use them to resolve disputes and fill out W-2 tax forms. They are required in some states and can be provided electronically or in paper form.

What Is Included in Check Stubs?

If you make check stubs, they should include the following information:

Personal and check information: This includes personal details, filing status (single or married), and the withholding number according to the IRS form W-4. This includes the employee’s name, address, and personal identifier, such as the last four digits of the Social Security Number.
Earnings: This section shows the pay for the period, including overtime, if applicable. It also lists pre-tax deductions for employee benefits like health insurance and retirement contributions.
Deductions: This section shows any additional deductions taken from the paycheck after tax, such as group life or disability insurance
Withholdings: This refers to the money that the employer must take out of the paycheck on behalf of the employee. This includes federal and state income tax payments, Social Security, Unemployment Insurance, and Worker’s Compensation.
Company Information: This typically includes the company’s name and address.
Pay Period: The dates corresponding to the pay period for which the employee receives payment.
Net Pay: This is the amount of money an employee is left with after all their deductions have been removed.
Year-to-Date (YTD) Information: This section displays the employee’s total earnings and deductions for the current year.
Rate of Pay: This indicates how much the employee is paid and at what intervals, such as hourly or salary.

The Purpose of Check Stubs

Check stubs, also known as pay stubs or paycheck stubs, serve the following purposes:

Proof of Income

A check stub serves as proof of income. It details an employee’s earnings for a specific pay period and the total earnings for the year. This is crucial when an individual needs to provide proof of income, such as when applying for loans, mortgages, or other types of credit. It can also be crucial when renting property or making large purchases.

Record Keeping

Check stubs are essential for record keeping. They provide a detailed record of an employee’s earnings, deductions, taxes, and net pay. This can be useful for both the employee and the employer. For the employee, it allows them to track their earnings and ensure they are paid correctly. For the employer, it provides a thorough record of payroll expenditures and aids in ensuring compliance with labor laws and regulations.

Tax Purposes

Check stubs are crucial for tax purposes. They provide the necessary information to calculate taxes owed, claim tax credits, and complete tax returns. Both employees and employers can use them to verify income for tax reasons. Check stubs are essential for tax purposes. They provide detailed information about an employee’s earnings and the amount of taxes deducted. This information is useful for both employees and employers during tax filing.

Legal Obligations and Compensation Claims

Pay stubs are required to show genuine paystubs when applying for compensation claims in cases of work accidents. They also help in complying with legal obligations and avoiding fines.

How to Make Check Stubs

Creating check stubs involves generating a document that details an employee’s pay information. This includes gross pay, deductions, and net pay. Here are the steps to create check stubs:

Gather the necessary information: You’ll need the employee’s personal information (name, address, social security number), pay rate, and the number of hours worked. You’ll also need information about deductions such as tax withholdings, retirement contributions, and health insurance premiums.
Choose a check stub maker or software application: Numerous online check stub makers and software applications can generate check stubs. Some of these tools are free, while others require a subscription or a one-time fee. When choosing a check stub maker, ensure it complies with your state’s laws and regulations regarding pay stubs.
Enter the information into the check stub maker: Once you have chosen a check stub maker, input the information gathered in step 1. The check stub maker will automatically calculate the gross, deductions, and net pay.
Review and distribute the check stubs: Review them for accuracy after generating them. If everything is correct, distribute the check stubs to your employees. You can do this electronically via email or print and hand them out.

How to Make Check Stubs For Your Business Using Online Tools

To make check stubs for your business using online tools, you can use various online pay stub generators such as Wix, StubCreator, Shopify, and Real Check Stubs. Follow the steps to make check stubs for your business and employees:

Choose a Pay Stub Generator: Select a pay stub generator that suits your needs. Different generators offer different features and templates, so choose one that is easy to use and offers the needed features.
Enter employee and business Information: To make check stubs, input all the necessary employee and business details. This includes the employee’s name, address, social security number, business name, and location.
Input salary details: Input the paycheck number, pay date, and payment period. Also, include information about the employee’s salary for the check stub maker’s calculator.
Input pay period and pay rate: Enter the employee’s pay period dates and pay rate. Some paystub generators also ask for the number of hours worked.
Provide additions or deductions: Include salary additions and deductions, such as overtime pay or tax deductions. The check stub creator will automatically calculate and update the net pay.
Preview and adjust: Review the pay stub to ensure all the information is correct. Some pay stub generators allow you to add the company’s logo or other branding elements.
Create and download: Generate the pay stub and save it in your preferred format (PDF, JPG, etc.).
Distribute: Finally, distribute the pay stub to the employee via electronic or traditional mail. The employee can choose how they wish to receive the pay stub.

Online Tools for Making Check Stubs for Your Business

Several online tools are available for making check stubs. Here are some options:

Real Check Stubs™

This tool offers a simple way to create accurate, professional, customizable pay stubs. It provides 16 pay stub templates, including advanced, classic, and modern designs. You can easily select a template, enter your information, and download the pay stub. The generated pay stubs can be emailed as PDFs or printed.

Shopify’s Pay Stub Generator

Shopify offers a free online check stub maker that creates pay stubs with all the necessary company, employee, income, and deduction information. It’s a simple four-step process where you fill in the required fields, and the pay stub is emailed to you for immediate download and use.

StubCreator

StubCreator is another pay stub generator that allows you to make check stubs online for free. It offers a quick and easy process where you fill in minimal details, choose a pay stub template, and the tool generates the pay stub instantly. You can preview the pay stub and download it.

Wave’s Pay Stub Generator

Wave’s pay stub generator is a free online tool that allows you to enter your company, employee, income, and deduction information to make professional check stubs. You can save the pay stub as a PDF to email to your employee or keep it for your records. The tool is fast, efficient, error-free, and cost-effective.

Advantages of Making Custom Check Stubs Using Online Tools

The advantages of using oline tools to make check stubs for for your employees and business include:

Automation and Accuracy

An automated pay stub generator can help reduce the likelihood of mistakes in computations. These generators are typically user-friendly and keep up to date with current tax laws and requirements. They also automatically calculate and update the net pay, including salary additions and deductions.

Cost-Effective

Creating custom pay stubs can be more cost-effective than hiring an accountant. Many online pay stub generators allow you to create pay stub records at a fraction of the cost you normally pay an accountant or a payroll company.

Data Privacy

Pay stubs contain sensitive information such as an employee’s social security taxes, number, address, work location, salary details, gross wages, and other personal details. Therefore, creating custom pay stubs allows for better control and protection of this information.

Increased Productivity

Creating custom pay stubs can increase productivity by streamlining lengthy processes. Instead of spending a lot of time manually processing payroll operations and understanding common deduction codes, current tax laws, and state laws, employers can use an online check stub maker.

Time-Saving

Using a legitimate and well-trusted online check stub maker assures business owners that the pay stubs created are authentic. This saves them much time that could be better spent elsewhere tackling other business tasks.

What Are the Options for Customizing a Check Stub?

Customizing a check stub involves several aspects, from the layout and design to its specific information. Here’s how to customize a check stub:

Choose a Template: There are many pay stub templates available online. Some platforms, like Real Check Stubs™, offer a variety of designs, including advanced, classic, and modern pay stub templates. These templates are 100% customizable, allowing you to add your logo or other branding components.
Enter Business Information: The business information includes the company’s DBA name and address. It is typically listed along the pay stub’s top or bottom.
Enter Employee Information: This section should include the employee’s full legal name, ID number, and potential social security information. If you mail paychecks to your employees, this section should also include the employee’s address.
Payment Details: This is the most extensive component of the pay stub. It should summarize how much the employee has earned during the applicable pay period and how much they have earned thus far this tax year. In addition, it should provide the number of hours worked, both regular and overtime, and specify the amounts earned for each type of income.
Include Additions or Deductions: Include salary additions or deductions, such as overtime pay or tax deductions. The check stub creator automatically calculates and updates the net pay.
Customize the Layout: You can customize the layout of your check stub based on your preferences. This could include changing the color scheme, font, or arrangement of fields.
Preview and Edit: Once you’ve entered all the information and customized the design, preview the final pay stub and make any necessary edits before finalizing.
Delivery Method: Decide how you want to deliver the pay stubs. You can email them as PDFs, print them out, or use both methods.

Methods for Distributing Check Stubs

Making and distributing check stubs can be a straightforward process, especially with the help of online tools. The distribution of check stubs can be done in several ways:

Email: Payroll check stubs can be emailed as PDFs that can be easily printed from your computer. This is a great way to save paper and postage.
Print: If you prefer, you can also print your check stubs. This is a great option if you don’t have access to a printer or simply prefer to have a physical copy of your paycheck stubs.
Online access: If the employer pays employees digitally, they can access their pay stubs online by logging onto the employer-provided payroll system where employee personal documents are stored.

How Can I Make My Check Stubs for Free?

You can make your check stubs for free using a spreadsheet program like Excel, Google Sheets, or a free online check stub generator.

#1. Using Excel or Google Sheets

Create a new spreadsheet: Open Excel or Google Sheets and create a new blank spreadsheet.
Set up the columns: In your spreadsheet, you’ll need several columns to represent the different components of a paycheck. These may include: employee name, pay period, hours worked, hourly rate, gross pay, deductions, net pay

Input the data: Enter the relevant data for each of your employees in the appropriate columns.
Calculate gross pay: Use a formula to calculate the Gross Pay for each employee. This would typically be =Hours Worked*Hourly Rate in Excel or Google Sheets.
Calculate deductions: Deductions will vary based on the individual’s circumstances. They may include things like taxes, insurance premiums, and retirement contributions. You can subtract these from the Gross Pay to get the Net Pay.
Calculate net pay: Use another formula to calculate the Net Pay. This would typically be =Gross Pay-Deductions.
Format and print: Once you have all the data, format the spreadsheet to your liking and then print it out to create a physical check stub.

#2. Using a Free Online Check Stub Generator

Find a free pay stub generator
Fill out the required information
Generate and print the pay stub

Overall, a check stub is important for your buiness and when making one ensure that all the information on the check stub is accurate and complies with local and federal laws.

References

ADP
Forbes