The deductions section of the pay stub should list all the deductions taken out of the employee's gross pay, such as taxes, Social Security, and Medicare. This section should include voluntary deductions, such as health insurance premiums or retirement contributions. It is important to list each deduction separately and clearly explain its purpose. This helps employees understand why their net pay is lower than their gross pay.
The tax section of the pay stub should list the federal, state, and local taxes that are withheld from the employee's gross pay. This section should also include the employee's filing status and the number of exemptions they claim on their W-4 form. Calculating these taxes correctly is important to avoid penalties or fines.The year-to-date totals section of the pay stub should list the total earnings, deductions, and taxes withheld from the employee's pay for the current year. This information is important for tax purposes and helps employees keep track of their income and deductions.
