How to Create a Payroll Your Employees Will Love

Trust is the cornerstone of the relationship between employer and employee. Among many other things related to day-to-day business, your employees trust that you will pay them fairly and correctly. And since only 21% of U.S. workers say they fully trust their company's leadership, one of the most basic steps you can take to build trust is to make sure your payroll is running like clockwork.

Whether it's miscalculating payroll, missing payroll deadlines, or neglecting careful bookkeeping, payroll errors can impact your credibility as a business owner. The good news is that you have a built-in accountability system thanks to the payslips your employees receive each week.

Payslips provide insight into the pay formula, are very useful for resolving discrepancies, and are often needed to help your employees achieve some of life's most important milestones. Keeping accurate records and encouraging your employees to check their paystubs regularly can increase their trust in your capable hands.

IceHrm promotes fast, easy and accurate payroll with a payroll solution backed by ongoing, expert support. Here you can find out what information belongs on a payslip and even get a free payslip template.

What is a payslip?

A pay stub, also known as a paycheck or earnings certificate, is a document that summarizes an employee's compensation. It's essentially a snapshot of how much he brings home, minus payroll deductions such as taxes and pension contributions.

Pay stubs can be printed and attached to paychecks, but some companies also send employees electronic pay stubs.

What is on a payslip?

Aside from the amount coming into the account, the payslip contains a number of details. First, it contains important identifying information, such as: E.g:

• Company name, address and telephone number
• Employee name, address, social security number and employee ID
• Date of start/end of the pay period
• Number of hours worked regularly or overtime
• Basic wage rate
• Check number
• Date of payout

The payslip then shows the amount the employee earned:

• Gross income
• Net income
• Overtime pay
• Paid Time Off (PTO)
• Commissions and Tips
• Advances on payroll
• Bonuses and Rewards

It also shows how much money is deducted from an employee's paycheck for:

• Federal and state income tax
• FICA (Social Security and Medicare taxes)
• FUTA and SUTA taxes
• Wage garnishments
• Voluntary payroll deductions for retirement savings, health insurance, charitable donations, etc.
  

In addition, payslips typically display current year (YTD) data, a summary of the employee's income and deductions from the beginning of the year to the current date.

Do employers have to provide pay slips?

Currently, the Fair Labor Standards Act (FLSA) does not require employers to provide pay stubs, but many states do - or at least require that employers provide employees with access to these records. But even if you work in a state that doesn't require pay stubs, you should provide them.

Payslips are a practical reference work. Employers use these statements to maintain accurate payroll records, complete IRS W-2 forms, and resolve discrepancies. Employees use their pay stubs to track their income and check withholdings during each pay cycle. Additionally, many landlords and lenders require pay stubs to prove a person's income. So they may be necessary to help your employees rent an apartment, get a loan, or refinance their mortgage.

By providing payslips that break down wages and salaries line by line, you can reduce the likelihood of potential disputes, make life easier for your employees, and provide greater transparency within your company.

How to create a payslip

Employers can create professional-quality payslips in a variety of ways. If you're just starting out and have limited resources, it may be most cost-effective to create payroll yourself. As your business grows and this task becomes more time-consuming, you should generally seek the help of payroll software.

Here are some of the most common methods for creating payroll.

Best Option: Payroll Software

The easiest way to create payslips for your employees is to use payroll software. Most payroll providers create payslips for each employee, automating the process for business owners. Let's see how this works using IceHrm Payroll as an example.

With IceHrm, employers manage the most important wage and salary data in one central location and enter important information such as

• Direct deposits
• Hourly wage, salary and overtime status
• Pay plan
• pay rate
• Withholdings

When you're ready to run payroll, all the information you entered will automatically flow into the system. All you then have to do is edit your employees' hours, make final raises, and verify deductions. (Yes, it's that simple!)

IceHrm creates payslips for employees under their profiles in an easy-to-understand format. On payday, they will receive a notification with a link to their pay stub, which they can view, download as a PDF, and save for their records.

Use a pay stub template to create a spreadsheet

A free way to create payroll is to use a spreadsheet in Microsoft Excel or Google Sheets. You can start by creating a payroll template from scratch, but it's usually easier to skip this step since many programs have built-in payroll spreadsheet templates.

Here's how to create a simple payroll worksheet:

Step 1: Create a spreadsheet with the information you want to include in your payroll.

• Step 2: Complete the table and check it for complete accuracy.
• Step 3: Insert formulas into the cells to automatically calculate the totals.
• Step 4: Highlight or color specific lines for clarity.
• Step 5: Print out the data for each employee.

Remember that the more employees and benefits your company has, the more complex your spreadsheet and its calculations will become. Aside from using software, a pre-built payroll template can make this task quicker and easier each week.

Other ways to create payslips

Many of the software programs that companies use for their daily operations also allow you to create payroll, such as:

• Microsoft Word: You can create payslips in a Microsoft Word document with a fillable form.
• Google Docs: Just like Microsoft Word, Google Docs allows you to create payslips from scratch.

Creating pay stubs manually in word processing programs can take some time, but there are plenty of templates available online. The downside is that you don't have a support team to help you with problems and you have to do the calculations by hand, which significantly increases the risk of human error.

Pay slips for the self-employed

As a self-employed person, you can pay yourself in a variety of ways depending on your business structure (e.g. sole proprietorship, LLC, S-Corp). For many, the easiest option is to pay yourself a regular salary just like any other W-2 employee, pay stubs and all. Keeping payroll records carefully helps ensure you pay your taxes correctly and makes it easier to provide proof of income for a personal loan or other reasons.

Are fake payslips illegal?

A fake pay stub is a fraudulent document that misrepresents income information. While creating fake pay stubs is not illegal in itself, using them for personal gain can lead to costly legal problems. For example, submitting false documents when applying for a loan - such as a fake payslip - is a criminal offense that can have serious consequences. A landlord can also take legal action against someone who has provided fake pay stubs as proof of income for renting an apartment.

Using secure payroll software helps employers prevent payroll fraud and makes creating paystubs a breeze for you and your employees. From monitoring daily payroll data to reviewing reports, a centralized system can make all the difference in your company's financial health.

Accurate payslips are crucial for employer-employee trust. IceHrm simplifies payroll with expert support, fostering transparency and confidence in your business.