Pay Stub

What Is a Pay Stub?

A pay stub is a document issued by an employer that shows an employee’s gross earnings, deductions from those earnings, and net pay. Pay stubs are created in conjunction with paychecks, so each employee gets a new pay stub for each pay period.

A pay stub may be created as a separate part of a paper paycheck, or it may exist in electronic form, which is commonly emailed to employees or made available online to confirm direct deposits of their paychecks.

A pay stub can also be called a paycheck stub, salary statement, earnings statement, or pay slip.

What Is on a Pay Stub?

Pay stubs show the total amounts an employee has earned, amounts deducted from those earnings, and the remaining take-home pay after deductions. Separate columns show figures for the current pay period and year to date.

Pay stubs show:

• The total amount (gross wages) earned, which may include:
  • Regular wages (salary or hourly earnings)
  • Commissions
  • Bonuses
  • Sick pay
  • Holiday pay
  • Vacation pay
  • Payroll advances
• Deductions, which may include:
  • Federal taxes
  • State taxes
  • Local taxes
  • FICA taxes (Social Security)
  • Medicare
  • Employee insurance premiums
  • Retirement or pension plan contributions
  • Garnishments
  • Loan payments
  • Charitable contributions

Some employers’ pay stubs also show the amount of remaining sick leave and vacation leave hours the employee is entitled to during the current year.

Workers who are paid by the hour and salaried non-exempt employees will see more details about their gross wages when applicable, including:

• Hourly rate of pay
• Number of hours worked at regular pay rate
• Overtime
• Shift differential
• Tips

Do Employers Have to Provide a Pay Stub?

In the United States, no federal law requires employers to give employees pay stubs, but many states require them. Details of those requirements vary from state to state, so it’s important to consult with state labor offices, especially if your organization does business in more than one state.

Even in states that don’t require pay stubs, employers are required by the Fair Labor Standards Act to keep records of employee earnings and hours worked, and employees are entitled to request the information.

How Are Pay Stubs Created?

When a business is new, small, or has very limited resources, it may have no choice but to handle pay stubs and other payroll responsibilities the hard way—manually. Doing payroll this way can mean relying on a jumble of spreadsheets, paper documents, separate websites, and so forth, every pay period. It’s possible to do it that way if you only have a few employees, but it’s complicated and time-consuming. Payroll software is a much better option for small businesses and becomes essential as they grow. Issuing paychecks and pay stubs is quicker and easier once the data is entered for each employee.