Payroll checks consist of two sections: the check and a payroll stub. Most businesses use payroll software to make a payroll check. Very small businesses that have only a few employees sometimes find writing payroll checks by hand is more cost effective. Either way, if you run a business, you need to know make a payroll check as part of properly managing your labor costs.
Instructions
1. Total the employee's gross pay for the pay period. Total the employee's hours and multiply by his pay rate. Any overtime hours (in excess of 40) must be paid at 1 1/2 times the regular pay rate. Enter regular and overtime hours and pay in the appropriate spaces on the pay stub. Total any other compensation (excluding nontaxable items such as mileage reimbursements) and enter on the pay stub. Add up the regular pay, overtime and additional compensation. This is the gross pay.
2. Use the employee's W-4 information to figure federal income tax withholding allowances. To calculate federal taxes to be withheld, you will need the instructions and tax tables for the current year. These are provided in IRS Publication 15 (Circular E).
3. Calculate other taxes to be withheld from the employee's gross pay. In addition to income tax, you must withhold Social Security and Medicare taxes. Publication 15 tells you calculate these taxes. In 41 states as of 2009, you also must deduct a state income tax. And some cities have a local income tax. Use the state (or local) instructions to compute these deductions. You can get instructions from your state Department of Taxation or Revenue.
4. Compute any other payroll deductions. These come in a variety of forms. If you have a health insurance plan and the employee pays part of the cost, this normally is deducted from payroll checks. There also might be contributions to a savings or profit-sharing plan.
5. Make a payroll check by filling out the check and payroll stub. The paycheck is completed like any other check. Enter the employee's name, the date, amount of the check in long form (words) and figures in the appropriate spaces. Include the dates of the pay period and sign the check. Payroll stub forms vary in their format. In most cases, all of the above information must be entered. Complete any "Year-to-Date" (YTD) sections by adding amounts from the current pay period to the previous pay period's YTD figures. This stub remains with the paycheck and is given to the employee for his records.
