What Is a Pay Stub?

what is a pay stub

While the above elements are all commonly found on paystubs, they may vary depending on your personal circumstances. For example, you may live in a state that doesn’t collect state income taxes. Or you may be on someone else’s healthcare plan, so you wouldn’t have any benefit deductions on your pay stub.

what is a pay stub

The taxes that the employer pays on the payroll are listed on the payroll stub with the pay period amount and the current year totals to date. Along with the payroll records, employers must also keep the records showing job evaluations, wage rates, seniority, and merit system. This is stored to clarify the basis of paying different wages to employees of the opposite genders working under the same organization.


The pay period section will showcase the period beginning and ending date, the total amount of hours worked, and the date the employee will receive payment. A flexible spending plan allows you to set aside pre-tax dollars for medical expenses including health insurance copayments, deductibles and prescription drugs. Contributions to a flexible spending account are deducted from your pre-tax income.

what is a pay stub

Excluding the legal proceedings, a pay stub can be an important aspect of the employer-employee relationship. Pay stubs can help an employee in almost all financial decisions and transactions. Situations like applying for loans, access to housing or other financial aids requires a pay stub as proof of employment.

How to Get a Copy of Your Pay Stub

Pay stubs can also help you prove accurate pay distribution should you need to. Regardless of whether or not an employer is required to issue pay stubs, workers can still submit wage claims, whether they’re W2 or 1099 workers. Your pay stubs should come with your physical paycheck or be available to view and download online.

While looking over stubs, check for correct pay rates, hours worked, and total earnings. If an amount seems unusually high or low, you can catch errors early to avoid IRS penalties and conflicts with employees. By reviewing their pay stubs, employees can make sure they were paid correctly and understand their deductions. Gross wages are how much money you owe an employee before you take out any taxes and deductions. If an employee has any nontaxable income, you must also include it under gross wages.

Are Pay Stubs Required By Law?

Employers can also use the information on the pay stub to resolve any disputes or confusion that may arise with regard to the payroll. Paycheck stubs are handy for the employer to fill out Form W-2 for each employee. Some states require that the employer give the employee pay stubs. Certain states also specify the information that must be listed on the paystub. The net pay of an employee is the final in-hand amount or rather the amount mentioned on their paycheck or directly deposited into their bank account as their salary. Usually, both the current net pay as well as the year-to-date net pay are mentioned on a pay stub.

NYS Payroll Online Office of the New York State Comptroller – New York (.gov)

NYS Payroll Online Office of the New York State Comptroller.

Posted: Fri, 03 Nov 2023 02:47:19 GMT [source]

It shows them all the deductions that resulted in the net pay that shows up on the paychecks. The information you must include on a paycheck stub can also vary by state. On the pay stub, create a separate line for each tax and show the amount withheld for the current pay period and year-to-date. Separate the employee-paid taxes from the employer-paid taxes on the pay stub. When onboarding new staff, employers typically walk them through how to log their hours but don’t always take the time to review their pay stubs.

What Is Included on a Pay Stub?

To find a salaried worker’s gross pay, divide their annual salary by the number of pay periods in the year. In fact, independent contractors and employees must be treated separately. In some companies, the employer makes contributions towards certain heads.

If you signed up for medical, dental or life insurance through your employer, your contributions to these plans will be deducted from your pay as well. If all of this information what is a pay stub sounds overwhelming, don’t worry—there’s a simple way to check your state’s rules. Just head to your state’s Department of Labor website to find out which rules apply to you.

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