What Is a Pay Stub and Why It Matters for Employees and Employers

Pay stubs detail wages, deductions, and taxes, helping employees track earnings and employers comply with state payroll regulations. They support loan applications, reduce payroll disputes, and are required or regulated in many states across the U.S.

By Douglas Wade, Attorney

Email | Call (800) 484-4610

Have a quick question? We answered nearly 2000 FAQs.

Table of Contents

1. Introduction

2. A pay stub: What is it?

3. What is the purpose of pay stubs?

4. What makes pay stubs significant?

5. What does a pay stub contain?

6. Do states demand pay stubs from employers?

7. Pay stub best practices

8. Frequently Asked Questions

Introduction

Pay stubs, often called wage statements or pay statements, are similar to payroll’s decoder rings. In addition to helping workers understand their paychecks, they also assist employers in resolving wage & hour disputes and tax inconsistencies. Additionally, pay stubs may be required for payroll compliance, subject to the state.

A pay stub: What is it?

A pay statement is a summary of an employee’s net pay, taxes & deductions, and gross compensation. It may be made available electronically or printed and sent with a paycheck. Employees in certain states are required to give their approval before they can get electronic payment statements.

What is the purpose of pay stubs?

Pay stubs are used by both employers and employees to confirm the accuracy of wages. Additionally, before granting a loan, lenders frequently need pay stubs as evidence of work or income.

What makes pay stubs significant?

Pay stubs are crucial because they facilitate open communication between employers and workers and lessen the likelihood of disputes over compensation. In the majority of states, they are mandatory as well.

What does a pay stub contain?

Pay statement information varies based on state or local regulations, benefit contributions, and a worker’s tax liability. However, the majority contain certain portions of the following information:

Contacts & Dates: Usually, a pay stub’s top section includes the worker’s full name & address, the company’s name and address, and the start and finish dates of the period of pay. In certain states, an EIN (employee identification number) is also necessary.
Pay hours and rates: For workers who qualify for overtime, pay rates (normal, overtime, double overtime, etc.) and the number of hours performed at every rate are very important.
Gross earnings: An employee’s gross pay is their total income before taxes and other deductions.
Employee taxes: The FICA (Federal Insurance Contribution Act) taxes, Medicare & Social Security, local and state taxes, if any, and federal income tax are the most typical taxes withheld from an employee’s paycheck.
Benefit deductions: Workers can make payroll deduction contributions to employer-sponsored benefits packages, such as health insurance or retirement savings.
Employer taxes & contributions: The employer part of FICA taxes, state and federal unemployment taxes, and any other applicable state or municipal taxes are typically the responsibility of the employer. If they provide benefits, they might also match worker contributions for retirement programs and cover a portion of the cost of health insurance for their staff.
Garnishments: Employers must garnish wages if a judge orders them to deduct a percentage of an employee’s income for child support, past-due loans, taxes, or other comparable reasons.
PTO (Paid time off): Pay stubs typically display the number of hours worked on personal, sick, or vacation days.
Net pay: After every payroll deduction has been made, the sum of money paid to a worker is known as net pay or take-home pay.

Do states demand pay stubs from employers?

While many local and state governments mandate firms to give pay statements to their employees, no federal legislation does. Businesses that employ people in several states may find these obligations challenging because every state has a unique set of regulations.

One such regulation is the availability of electronic pay statements. The following are some versions of it:

States without any regulations: Some states provide employers complete discretion over whether to issue pay statements on paper or electronically.
Print/access states: Certain states require firms that use electronic pay statements to make sure workers can access and print them with ease.
States with opt-in: If employees do not agree to receive a digital version, they will inevitably get printed pay stubs.
States with opt-outs: A digital pay statement may be provided by employers, but a printed pay statement is required for any employee who asks for one.

Pay stub best practices

Employee confusion and legal liability might result from erroneous or improperly issued pay statements. To steer clear of these circumstances, follow the following best practices:

Recognize all local and state obligations: Pay statement standards can be found on websites run by local and state governments, as well as by payroll industry associations.
Include the relevant details: The majority of states mandate that employee pay statements include certain details, including total hours performed, gross and net compensation, deductions, hours and rates of pay, and the start and end dates of the pay period. Additionally, employers ought to be aware of any applicable industry-specific regulations or best practices.
Make it simple to view pay stubs: Employers are required by law in many states to provide employees with pay statements. Additionally, the opportunity to obtain their pay stubs without excessive strain is frequently appreciated by employees who are applying for loans.
Collaborate with a payroll services supplier: In addition to delivering pay stubs as a component of their services, payroll companies can help employers fulfill local and state pay statement obligations.

Frequently Asked Questions

1. Are pay stubs and pay statements interchangeable?

Indeed, a pay statement is also known as a pay stub. It may also be called a pay slip, wage statement, or paycheck stub.

2. How can I obtain pay stubs?

When an employee’s paycheck is printed, their pay statement is usually included with the check. People who have electronic paycheck delivery, such as direct deposit, can usually check their pay statement using an online portal that their employer provides or make a formal request via human resources.

3. For what reason should employers furnish a pay stub?

Pay statements are typically provided by employers due to state and local regulations. Additionally, pay stubs might assist avoid employee misunderstandings.

4. If you misplace your pay stub, how would you respond?

Personal data on pay statements may be vulnerable to identity theft. It is crucial that they be stored in a secure location and disposed of safely. Workers may choose to keep an eye on their credit score and notify their bank & credit bureaus if they lose their pay stubs so that they may report any questionable behavior.

If an employee needs a copy of their missing pay statement, they can typically get one from the payroll or human resources department of their workplace. However, each employer has a different actual procedure.

Have a quick question? We answered nearly 2000 FAQs.

See all blogs: Business | Corporate | Employment

Most recent blogs:

What Is a Pay Stub and Why It Matters for Employees and Employers

What Are the Proper Steps to Fire Someone in California?

Terminating an employee in California requires following legal guidelines, maintaining professionalism, and ensuring proper documentation. This guide outlines lawful termination reasons, key procedural steps, and best practices to reduce legal and financial risks.

How Long Does a Misdemeanor Stay on Your Record in California?

A misdemeanor conviction in California stays on public record indefinitely but may be eligible for expungement under specific conditions. Background checks typically show misdemeanor convictions for seven years, but expungement can remove them from most employment screenings.

How Do I Prepare a Script for Firing Someone?

Learn the professional steps for firing an employee, from preparing a script to handling emotional reactions. Understand the proper procedures, reasons, and communication techniques to ensure a smooth and respectful termination.

What Is Involved in a PAGA Lawsuit?

PAGA lawsuits allow employees to file claims for labor code violations on behalf of themselves and others in California. Employers can face significant penalties, prompting many to settle to avoid costly judgments.

What Are the Rules for 10-Minute Breaks?

California law mandates two paid 10-minute breaks and a 30-minute unpaid meal break for an eight-hour shift. Employers who fail to provide required breaks may face penalties, and employees can seek legal action for compensation.

Can I Work Six Hours Without a Lunch Break?

California law requires a 30-minute meal break for shifts over five hours, but employees can waive it if working exactly six hours. Employers must comply with strict labor laws, ensuring uninterrupted meal breaks and legal protections for workers.

What Can I Do If My Employer Didn’t Pay Me on Payday?

Employers in California must pay workers on time, or they may face penalties of up to 30 days' wages for delays. Employees can file wage claims, seek legal assistance, or report violations to the California Labor Commissioner's Office for unpaid wages.

What Qualifies as a Hostile Work Environment in California?

Employees in California facing severe or persistent harassment based on protected traits may have legal options under state and federal laws. Filing a complaint with the California Civil Rights Department or consulting an employment attorney can help protect workplace rights and seek compensation.

When Is a Doctor’s Note for Work Required in California?

California employers generally cannot demand a doctor's note for sick leave, but exceptions exist under specific laws and circumstances. Legal conflicts persist, and employers may require medical documentation for disability accommodations, FMLA leave, or other valid reasons.

What Does California Law Say About Final Paycheck Rules?

California law mandates that final paychecks be provided promptly, with termination pay due immediately and resignation pay within 72 hours. Employers must include all owed wages, expenses, and accrued benefits, with penalties for late or incomplete payments.

Can an Employer Deny a Doctor’s Note?

An employer may deny a doctor's note if the absence does not qualify for legal protections under disability or family leave laws. Employers must evaluate medical documentation, employee statements, and applicable laws before considering disciplinary action.

How Much Can You Sue an Employer for Misclassification?

An employer's misclassification tactics can deny you fair wages, benefits, and legal protections. You may be entitled to compensation, including back pay, retirement contributions, and potential punitive damages, by pursuing legal action.

How Serious Is an EEOC Complaint?

An EEOC complaint can lead to costly legal battles, reputational damage, and mandatory policy changes for businesses. Employers may face financial penalties, investigations, and compliance requirements, impacting operations and workforce morale.

Do You Have Sample Letters for Termination of a Contract?

A contract termination letter formally ends a business agreement while protecting interests. This guide outlines key steps, considerations, and sample letters.

What Is a WARN Notice in California?

The California WARN Act requires businesses with 75 or more employees to provide 60 days' notice before mass layoffs, plant closures, or relocations. Noncompliance can lead to fines, back pay, and healthcare costs, making adherence essential for legal and financial stability.

What Is FICA and How Does It Impact Payroll Taxes?

FICA is a payroll tax that funds Social Security and Medicare, requiring contributions from both employers and employees. Employers must withhold, match, and submit FICA taxes while following IRS guidelines on deposit schedules, wage bases, and additional Medicare tax requirements.

What Is At-Will Employment and How Does It Impact Employee Rights?

At-will employment allows employers and employees to end their working relationship at any time without cause, impacting job security and flexibility. While it provides businesses with staffing flexibility, employees face fewer legal protections and potential job instability.

Employers Should Exercise Caution When Terminating Employees After Disability Leave

Employers should exercise great caution when considering whether to terminate an employee who is on leave. Employers are cautioned not to automatically terminate employment solely because an employee has used or exhausted their disability leave entitlement.

What Is FUTA? 2025 Rates and How to Calculate FUTA Tax

The Federal Unemployment Tax Act (FUTA) imposes a payroll tax on businesses that have employees, collecting revenue that funds unemployment benefits.

What Is the Difference Between a 1099 Contractor and an Employee?

A 1099 contractor operates independently, covering their own taxes and expenses, while a W-2 employee receives benefits and employer tax contributions. Misclassifying workers can result in fines, making it essential to assess control, financial arrangement, and job nature before classification.

How Do Contractors Typically Get Paid? Payment Methods and Legal Guidelines

Contractors receive payments through direct deposits, checks, payroll services, or online transfers, following legal and tax regulations. Proper classification, documented agreements, and compliance with IRS reporting ensure smooth transactions and avoid penalties.

What Is the Definition of a Non-Exempt Employee?

Non-exempt employees are entitled to overtime pay and must earn at least the federal minimum wage under FLSA regulations. Unlike exempt workers, they are typically paid hourly and receive 1.5 times their wage for extra hours.

Can Union Representatives Be Present at Disciplinary Meetings?

Employees have the right to request a union representative during investigative interviews that may lead to disciplinary action. Employers must comply or face potential labor law violations under the National Labor Relations Act.

What Is an FTE (Full-Time Equivalent)?

A full-time equivalent (FTE) measures employee work hours, combining part-time and full-time schedules into a standardized metric. Businesses use FTE calculations for staffing, budgeting, and compliance with regulations like the Affordable Care Act.

What Are the Signs of Unfair Treatment at Work?

Unfair treatment at work includes discrimination, pay gaps, and biased promotions, impacting employees' well-being and career growth. Recognizing signs like harassment, favoritism, and wrongful termination helps employees take action against workplace discrimination.

What Is a Statutory Employee on a W-2 Form?

A statutory employee is a self-employed worker classified as an employee for tax withholding purposes, receiving a W-2 instead of a 1099-MISC. These workers can deduct business expenses on Schedule C but typically do not receive traditional employee benefits like health insurance or retirement plans.

What Is a Pay Stub and Why It Matters for Employees and Employers

Introduction

A pay stub: What is it?

What is the purpose of pay stubs?

What makes pay stubs significant?

What does a pay stub contain?

Do states demand pay stubs from employers?

Pay stub best practices

Frequently Asked Questions

What Is a Pay Stub and Why It Matters for Employees and Employers

What Are the Proper Steps to Fire Someone in California?

How Long Does a Misdemeanor Stay on Your Record in California?

How Do I Prepare a Script for Firing Someone?

What Is Involved in a PAGA Lawsuit?

What Are the Rules for 10-Minute Breaks?

Can I Work Six Hours Without a Lunch Break?

What Can I Do If My Employer Didn’t Pay Me on Payday?

What Qualifies as a Hostile Work Environment in California?

When Is a Doctor’s Note for Work Required in California?

What Does California Law Say About Final Paycheck Rules?

Can an Employer Deny a Doctor’s Note?

How Much Can You Sue an Employer for Misclassification?

How Serious Is an EEOC Complaint?

Do You Have Sample Letters for Termination of a Contract?

What Is a WARN Notice in California?

What Is FICA and How Does It Impact Payroll Taxes?

What Is At-Will Employment and How Does It Impact Employee Rights?

Employers Should Exercise Caution When Terminating Employees After Disability Leave

What Is FUTA? 2025 Rates and How to Calculate FUTA Tax

What Is the Difference Between a 1099 Contractor and an Employee?

How Do Contractors Typically Get Paid? Payment Methods and Legal Guidelines

What Is the Definition of a Non-Exempt Employee?

Can Union Representatives Be Present at Disciplinary Meetings?

What Is an FTE (Full-Time Equivalent)?

What Are the Signs of Unfair Treatment at Work?

What Is a Statutory Employee on a W-2 Form?

What Laws Protect Employees From Workplace Bullying?

Employee Time Card Laws California

Understanding California’s Break Laws

Free Consultation