It’s convenient for paychecks to be directly deposited into bank accounts, but it can also be a case of “out of sight, out of mind” for employees.
A whopping 80 percent of U.S. workers never see their pay stubs, which can later lead to problems. This is why IPS recommends that employers routinely encourage employees to check their pay stubs to confirm that they’re receiving accurate pay, and that the correct amount of taxes is being withheld. It’s far easier to correct in March than to wait until the following January when the W-2 arrives.
Here is how to proactively educate your employees on how to perform a “paycheck checkup.” The IRS provides two excellent resources for this purpose:
- The Tax Withholding Estimator helps employees confirm if they are withholding the right amount of federal income tax from their paychecks.
- The W-4 Form is used to tell an employer how much tax to withhold from an employee’s paycheck. If they need to adjust their tax withholding, they should complete a new W-4 and submit it to you.
Encouraging employees to be proactive about their paychecks helps them, and it makes your job easier by avoiding corrections and questions at year-end. If you have additional questions, contact your IPS representative.