Pay stubs are a very important part of your finance system and are often the thing that keeps your payroll working properly. However, you also need to be sure that they are working well if you want them to give you good results, especially where tax and accounting information are involved.
If a pay stub calculates finance information incorrectly or does not account for something important, then you could end up underpaying – or overpaying – employees and sending away incorrect tax information that gets you into legal trouble.
So how do you test your pay stubs, and how can you fix issues that might arise if they are not set up correctly?
One of the most common things you can run into is a pay stub that does not calculate something correctly. This usually happens when a pay stub is not using the right formulas and equations to add everything together or if the information in the stub itself is flawed from the beginning.
Either way, it is very important to figure out of the information or the calculation is wrong, or both. If it is just the information, then you can easily fix that in your database. A calculation being wrong could have affected other pay stubs in the past, so you will have to check multiple in the same batch just to be sure.
Fixing your own pay stubs is quite easy as long as you have a template to work with. Consider taking the basic, empty stub and adding some fake data into it, making sure to keep track of how each formula should work. If you see any inconsistencies or faults, then something is wrong with the stub.
This can be helpful if you have been having issues getting the tax to calculate properly since these are often harder to add together than the gross and net pay of the employee. If you do not have any accounting specialists in the company, consider getting outside help or looking at tax breakdowns online.
These calculations are rarely easy to figure out, but taking them step by step can help a lot. If you do not have professional accounting experts in the business, then try to break down each formula into individual steps, then see which ones may have been set up poorly.
It is easy for data to be entered incorrectly if you do not have an experienced finance team within the business. If the HR team has to handle pay stubs themselves, then it is easy for somebody to accidentally mix up tax numbers – and even with dedicated accounting teams, human errors can happen.
When this happens, you need to start running fake data through the same payroll system to see if you can find the fault. It might simply be something as small as a spreadsheet formula not being handled correctly or a particular piece of information missing a decimal point somewhere.
The larger your company, the more likely you are to end up with incorrect data or other similar mistakes. However, a small company can still run into these problems, and they are impossible to predict in any useful way. You simply have to deal with them as they arise, no matter how big they are.
You can learn how to make fake check stubs using online generators as a way of testing the data you have been given, too. If the error does not seem to be in a formula, then you might have to check your data and make sure that something has not been mixed up.
In extreme cases, there could be problems with the original information you gathered not being correct. This is not likely, but in a larger company, it is easy to accidentally get information wrong, so you will want to get up-to-date corrections as fast as possible.
Keeping backups of data can often be a good way to check a certain pay stub or part of the payment system, especially if you think something was added incorrectly. Even one incorrect number could completely change the total sum that the system thinks an employee has earned.
Working with payment information can be risky no matter how careful you are since there is always a chance that something could go wrong. This is not just about payment details being handled incorrectly, but also problems with the payment process itself.
One of the more common reasons that companies may struggle is a sudden shift in the kind of employees that they take on. A change over from salaried employees to waged employees means having to use a completely different payment system and pay stub structure.
This means either creating two sets of pay stubs – one for wages and one for salaries – or having a combined pay stub that can be used for either. However, if you are not prepared, it can take a lot of time to figure out how the accounting details and finance equations should all fit together.
Beyond that, you have to be sure that the payments can actually go through. If you are not careful, you could input some details incorrectly and never actually send an employee the money that they earned, meaning that you will have to redo that payment from the beginning.
Fixing Payment Problems
The payments that you make to your employees should be checked as often as possible, no matter how sure you are that the details are all correct. If even one thing is out of place, it could stop an employee from getting their wage or salary for the month until you correct the mistake.
Always be sure to double-check employee information before putting it into any kind of pay stub or payroll system. If anything seems off, then be sure to correct it as soon as possible, even if this means delaying that payment slightly. A late payment is better than nothing at all.
A lot of this data can also be very sensitive, so you need to avoid leaking it to people who could use it for malicious purposes. Make sure that you do not leak an employee’s details when you are trying to ask them for corrections or clarification.