What Is a Pay Stub?
A pay stub (also called a wage statement, payslip, or paycheck stub) is a record provided to employees each pay period that details gross earnings, deductions, and net pay. It explains where each dollar goes and what remains as take‑home pay.
Key Elements of a Pay Stub
A typical pay stub includes:
- Employee & Employer Info: Names, addresses, employee ID, pay period dates
- Earnings: Gross pay from salary, hourly work, commissions, bonuses, overtime
- Hours & Rates: Especially for hourly employees—regular hours, overtime, shift differentials.
- Deductions: Federal, state, local income taxes; Social Security; Medicare; insurance; retirement contributions; garnishments.
- Year‑to‑Date Totals: Cumulative summaries of earnings, taxes, and deductions
- Net Pay: Final amount after all deductions—the employee’s actual take-home pay
Why Pay Stubs Are Important
For Employees:
- Offers payroll transparency
- Helps verify accurate withholdings and deductions
- Supports budgeting, tax filing, loan applications, and recordkeeping.
For Employers:
- Provides documentation for wage audits and legal compliance
- Serves as a reference for payroll disputes or corrections.
While U.S. federal law does not require employers to issue pay stubs, many states mandate them or require employers to maintain corresponding employee payroll records.
Pay Stub vs. Paycheck: What’s the Difference?
- A paycheck is the actual payment (direct deposit or check).
- The pay stub is the detailed statement that accompanies the paycheck, explaining all income and deductions.
Best Practices for Employers
- Provide clear, easy-to-read pay stubs each pay period
- Ensure timely delivery—paper or digital—so employees can review earnings
- Keep at least three years of payroll records, including time sheets and deductions, to comply with labor regulations
- Encourage employees to review pay stubs and report discrepancies promptly
