How to Make Payroll Checks
The Department of Labor notes that employers are required to appropriately compensate employees for time worked. Furthermore, some states set their own wage laws to protect the wage earner's rights. Consequently, the employer can face investigation and criminal prosecution for failing to pay wages. It is therefore critical that as an employer you have a payroll-check processing system in place that allows you to meet this objective.
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Instructions
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Determine the employees' gross wages. For hourly workers, add up regular hours, and if applicable, overtime hours worked during the pay period; for instance, 40 regular hours for the week. Multiply the hours by the hourly rate. For instance, 40 hours x $11/hour = $440.
Pay salaried workers their set pay each payday; for instance, $52,000/year, paid biweekly = $52,000 / 26 pay periods = $2,000.
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Subtract all deductions from gross wages. This includes payroll taxes, such as federal income tax; Medicare and Social Security taxes; and state income tax and wage garnishments, if necessary. Then, deduct voluntary deductions, such as health and retirement benefits. The result is the net pay. This amount should be shown on the top portion of the check. Show the terms of the payment, such as hours, pay rate and deduction types and amounts on the bottom portion of the check, also called the "paycheck stub."
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Print the payroll check using whichever method suits you best. If you have quite a few employees, such as more than 10, it would be best to invest in payroll software. Software programs such as QuickBooks, Peachtree and PenSoft are designed for small to mid-sized businesses. The software simplifies payroll processing and generates and prints payroll checks quickly. It also has the payroll tax tables hard-coded in the system, relieving you of computations. Some companies also offer a free trial.
If your payroll is large and includes multi-state and multiple pay cycles plus extensive benefits processing, a more expensive but expansive system, such as Ultimate Software's Ultipro would be necessary. The software company can usually provide you blank checks and the special toner (MICR) needed to print payroll checks. Or, you may purchase them at a stationary shop.
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Provide employees with handwritten payroll checks, if your payroll is manual. A manual payroll is done entirely by hand; therefore, use this method only if your payroll has fewer than 10 employees. You may also print the payroll checks on a typewriter.
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Tips & Warnings
For a small fee, a payroll company can process your entire payroll, including payroll check printing. See Resources for a list of payroll companies the Internal Revenue Service recommends.
References
Resources
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