The Two Types of Pay Slips Explained: Pros, Cons and Benefits
Since the Payment of Wages Act from 1991, all employers must provide their employees with a payment slip that shows payment details. The payslip is an official written statement that is prepared by the employer and given to the employee and which consist of information about the total pay before tax and all the details and deductions for the pay. It can be given as hard copy or as an electronic format. Therefore there are two types of payslips, hard copy and ePay slips. Here is what they must contain and the basic advantages and disadvantages of both types.
The Information Inside
First of all, it should contain the gross pay. That is the full payment before any tax or deduction has been made to the whole sum. Second of all, the total amount of take-home pay after deductions which are called “net pay”. Next, the amounts of any deduction that change from payday to payday and these are known as variable deductions and include the tax and National Insurance.
Another important information is the total amount of any fixed deductions. These deductions don’t change from payday to payday and such an example are the union dues.
As of April 2019, the work hours must be presented as well where the wage is directly related to the number of work hours of the employee.
There is also additional information that can be included if the employer thinks they are important. Such information is the tax code, the National insurance number, the pay rate and additional payments, for example, overtime tips or bonuses.
Types of Pay Slips
A4 Laser Pay Envelopes
They are confidential and secure sheets of paper specially designed to be the ideal solution for providing safe pay details to the employees. They can be bought as A4 laser pay envelopes and can be self-seal, peel and seal and pressure seal.
These pay envelopes are made to be compatible with the accounting software on the market: MYOB, Attache, Quicken and Rocksfast, to name a few. The form is a valid financial document that can be used in any financial institute as proof of the financial condition of the person. They serve as proof of employment as well.
They can be printed in a laser or inkjet printer or photocopier and can be sealed by folding the form manually or with use of a paper folding machine. The A4 laser pay envelopes eliminate the need for putting pay details into separate envelopes and sticking address labels on them which is a pretty good deal when it comes to convenience and saving time and money. Usually, they are distributed before or on the day of payday.
Apart from them saving time and money, they are secure and confidential. Inside, extra money, bonuses or tips can be included and they will be privately distributed to the employees.
As we love in the era of technology and everything (literally everything can be done online), the pay envelopes are replaced by electronic payslips. This is a self-service online facility that allows employees to access their payslip from a secure website using their laptops, tablets or phones.
It was reported that more than 83% of the ePay slips had reduced costs when they switched to the electronic version of payslips. The savings were impressive, ranging from $2.100 to more than $10.000. Plus the delivery process is improved as there is no returning payslip via the post or waiting for the employee to pick it up. The users of ePay slips just need to log onto their accounts and check them out.
Another benefit is that they are eco-friendly as there is no carbon footprint left in the environment. And, there is a reduced storage place for the business as with the printed payslips they would have to store the undelivered or uncollected payslips.
The Bottom Line
Both types have their pros and cons and it is up to businesses to choose which one is better for them. Some prefer hard copies as they feel it is more confidential and secure plus it strengthens the relationship between the employer and the employee. On the other hand, other businesses want to keep pace with the technological time and use its advantages, thus they turn to ePay slips.
Perhaps the fear of having the online system hacked by third parties is the reason why businesses tend to choose hard copies rather than the electronic ones. Nevertheless, the safety is guaranteed by the ePay slips provider which means it all comes down to personal preference in the end.