Even if you plan to use a pay stub generator, it’s still good to know how to do it manually. Learn how to create a pay stub in Excel with this guide.
Many business owners choose to do payroll on their own. Some will use accounting software, while others will still use pen and paper to create pay stubs and checks. Payroll mistakes are made by about a third of all businesses, which cost billions in tax penalties. There is an easier way to create a pay stub and minimize mistakes—you can use Excel. Creating a pay stub in Excel is one way to go about it that’s also free to do. Read on to find out how you can create a payroll stub template, plus discover other ways to create payroll templates.
Sketch out the Payroll Stub
Creating a sketch of what you want the payroll stub to look like will make it easier to create in Excel. It also helps you fully understand everything you need to have in your pay stubs.
There will be different items on pay stubs depending on the benefits you offer and your location. For example, you may live in a state that doesn’t collect state income taxes. You don’t need to include that on your template. The information that you do need to include are the employee’s information (name and address), the pay period, hourly rate or salary, hours worked, and any vacation time or overtime worked.
Then you can list out the deductions, which include federal income taxes, FICA taxes, state and local taxes (if applicable), and benefits like a 401(k) plan or healthcare. You’ll also need to account for what the total amounts were for the pay period and the year to date.
Make an Excel Table
When you open up an Excel spreadsheet, there is nothing but boxes. This is your canvas that you’ll turn into a workable payroll stub template. You’ll want to make a table that contains enough space for all of the necessary fields.
Start From the Top, Your table can be customized by creating space for your employee’s information and the date. There are a couple of ways to do this. You can customize the space by adjusting the space between columns and rows.
You can also combine cells on the spreadsheet by using the “Merge and Center” function in Excel. Just select the cells you want to form the larger space, go to the top, and select “Merge and Center.” You can then further customize cells by using different background colors for a look that’s consistent with your company’s brand.
You may have a table that needs more space to account for the earnings and deductions for the pay period and for the year to date. If you want them to appear side by side, you can either insert an additional cell or split the cells in half. All you have to do is right-click the cell to see your options and select the one that you want.
As you’re creating your spreadsheet, you want to refer to your sketch to make sure that you include everything. If you do happen to miss something, then add a cell, a row, or a column to correct your error. It’s as simple as a right-click.
You do need to have a system in place for managing your templates. This is part of maintaining good records. Once you have the payroll stub template, you have to remember to create a copy of the template for each payroll stub that you create.
If you forget to make a copy of the file or overwrite the template, you lose that information. You should print out copies of each pay stub that you create (one for your records, the other for the employee). You’ll then have to have a filing system that is organized and easy to access. An alternative is to make a copy of the payroll stub template for each employee and create a worksheet for that employee for each pay period.
Alternatives to Creating a Pay Stub in Excel, Do you have to use Excel to create a pay stub? No, Excel does offer many benefits, and it’s a big step up from using handwritten pay stubs. If you’re comfortable using Excel, you’ll find it very easy to create and customize your templates.
On the other hand, if you’re not that comfortable using Excel, there are other solutions that offer the ability to create a payroll check template. Many of these solutions are found online. You just need to enter the information and some of these solutions will calculate taxes and deductions for you. There are also advanced payroll solutions that are apart of accounting suites. These tend to cost more money and may not be worth it if you have few employees.
Make Payroll Easier With Excel
Payroll is time-consuming and costly for many businesses. Mistakes can easily be made, which can cost your business a lot of money. You want to use a payroll stub template to help you limit those errors and maintain good business records.
It is possible to create a pay stub in Excel by knowing what you need on your pay stubs. You can then create and customize your tables to make sure all of the information is listed. All you have to do is enter the information and save a copy. Do you want more great tech tips? Head over to the home page for the more great information.