What is a Pay Stub?
A pay stub lists an employee’s gross pay, pay period, total hours worked, and deductions. Common deductions include income taxes, Social Security taxes, and union dues. Pay stubs can also report earnings for overtime, bonuses, allowances, and commissions.
An employer issues a pay stub to an employee each pay period, detailing that employee's gross earnings, deductions from those earnings, and net pay.
Pay stubs can be generated by an automated payroll service or manually by the employer. Employers are required by federal law to provide a pay stub within two pay periods after the end of each calendar quarter.
Why are pay stubs necessary?
Without pay stubs, employees would have no way of knowing how much money they earned or what deductions were taken out of their paycheck. Pay stubs also provide a record of an employee's earnings, which can be useful for tax purposes or in the event of a dispute.
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 earned, 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
