A statement of earnings, also known as a pay stub or paycheck stub, is a document provided to employees by their employer that outlines the details of their earnings for a specific pay period. It typically includes various pieces of information related to compensation and deductions. Here are the key components typically found on a statement of earnings:
Employee Information: This section includes basic information about the employee, such as their name, address, employee ID number, and sometimes their social security number.
Pay Period: The statement indicates the dates covered by the pay period for which the employee is being paid.
Earnings: This section details the employee's earnings for the pay period. It typically includes:
- Regular Hours Worked: The number of hours the employee worked at their regular pay rate.
- Overtime Hours: If applicable, the number of hours worked at an overtime rate.
- Rate of Pay: The employee's hourly rate or salary.
- Gross Earnings: The total amount earned by the employee before deductions.
Deductions: This section lists various deductions taken from the employee's gross earnings, which may include:
- Federal Income Tax: The amount withheld from the employee's earnings for federal income taxes.
- State Income Tax: If applicable, the amount withheld for state income taxes.
- Social Security Tax: The employee's contribution to the Social Security program.
- Medicare Tax: The employee's contribution to the Medicare program.
- Health Insurance Premiums: If the employee has health insurance coverage through the employer, the amount deducted for premiums.
- Retirement Contributions: Any contributions the employee makes to a retirement savings plan, such as a 401(k).
- Other Deductions: Any other deductions specified by the employee or required by law.
Net Pay: This is the amount of money the employee receives after all deductions have been subtracted from their gross earnings. It represents the employee's take-home pay for the pay period.
The statement of earnings serves as a record of the employee's compensation and deductions for each pay period and provides transparency regarding how their earnings are calculated and distributed.
