4 Payroll Questions your Employees may ask you

Have you had employees come to you with questions regarding payroll that you know the answer to but just cannot put a finger on where to begin explaining? Below are a few typical payroll questions your employees may ask and how you can proactively manage your responses.

Why is the amount on my final pay stub different than that which is listed on my W-2?

This is a typical year-end-processing question. The primary reasons why the amounts differ on a final pay stub and a Form W-2 are:

• The employee earned non-taxable income items, such as vehicle allowances.
• The employee participated in a company health insurance plan that is considered a pre-tax deduction.
• The employee participated in a retirement plan such as a 401(k) that has been sponsored by the company.

What is the difference between gross and net income?

Gross income is the total amount of monies earned before expenses, taxes and deductions have been applied. Net income is the take home amount employees receive after expenses, taxes and deductions are applied.

When are W-2 Forms typically available?

Forms W-2 must be postmarked to employees by January 31, according to IRS guidelines. Communicate to your employees that they will have theirs by this date if not sooner, and aim for that.

Why is my take-home pay different than my annual salary?

This difference in amounts is due to the amount of taxes that are deducted as well as other payroll deductions that apply. Take-home pay is specific to tax forms employees fill out during onboarding.