When you have sầu employees on payroll, you withhold taxes và issue payments on a regular basis. And regardless of which way you choose to lớn pay your employees (e.g., direct deposit), there is one vật phẩm you typically need lớn give to employees: a pay stub. But, what is a pay stub? What is on a pay stub? And, is it really necessary to lớn provide one to your employees?

What is an employee pay stub?

A pay stub, also known as a check stub, is the part of a paykiểm tra or a separate document that lists details about the employee’s pay. It itemizes the wages earned for the pay period and year-to-date payroll information. The kiểm tra stub also shows taxes & other deductions taken out of an employee’s earnings. And, the pay stub shows the amount the employee actually receives (i.e., net pay).

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What is on a pay stub?

There are many details on a pay stub that help you and your employee keep traông xã of payments, taxes, và deductions. Generally, the items on a pay stub include:

Employee taxesDeductionsEmployer contributionsEmployer taxes

To understand what information lớn include in a pay stub, take a look at each category below.

Gross wages

Gross wages are the starting point of your employee’s pay. 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.

How you calculate the employee’s gross wages depends on if they are hourly or salaried. For hourly workers, multiply the employee’s hourly pay rate by the number of hours worked in the pay period. To find a salaried worker’s gross pay, divide their annual salary by the number of pay periods in the year.

Typically, the pay stub shows gross pay information in two separate columns: current gross pay và year-to-date gross pay

An employee’s gross pay portion of the stub may also include the following information:

Total hours worked: Pay stubs for hourly và nonexempt salary workers must include the number of hours worked. Nonexempt employees can work different types of hours, such as regular, overtime, & double-time. Include the total hours for each type of hour on the check stub. On the pay stub, make sure each kind of hour worked is on its own line. You may also record salaried employees’ hours on their pay stubs, however, it’s not mandatory. Separate the hours worked into current and year-to-date columns.

Pay rate: You should include the employee’s pay rate on their pay stub. For hourly workers, note each employee’s hourly pay rate. If you have a salaried worker, show the salary amount of pay for the pay period worked. Also, record an employee’s separate pay rate(s) on the pay stub for any overtime, double-time, etc. worked.

Employee taxes

Employees do not take home their gross pay amount. Payroll taxes and other deductions (we’ll get to lớn those later) reduce the employee’s earnings. The pay stub itemizes taxes so that employees can see all the tax amounts withheld from their gross pay.

Standard employee payroll taxes on a pay stub include:

Federal income taxState income taxLocal income taxState- and local-specific taxes

On the pay stub, create a separate line for each tax và show the amount withheld for the current pay period & year-to-date. Separate the employee-paid taxes from the employer-paid taxes on the pay stub.

Deductions

The payroll deductions on a pay stub vary depending on the small business employee benefits you provide. For example, an employee might contribute to lớn insurance premiums or retirement plans.

Deductions could also include charitable contributions, payments toward loans, and any other voluntary or involuntary deductions (e.g., child support). List each deduction on its own line, & show current and year-to-date totals.

Employer contributions

Depending on your business, there may be some line items on an employee’s pay stub that you don’t deduct from the gross pay amount. These generally include amounts you contribute as an employer.

You might contribute to:

Health insurance premiums401(k) plansOther retirement plans

List each contribution on its own line with current and year-to-date totals.

Employer taxes

Employers must also pay payroll taxes for each employee. Include these taxes in a separate section with current và year-to-date totals. Employer-paid payroll taxes include:

State unemployment taxes (SUTA tax)The employer portion of FICA tax

Cheông chồng with your state to lớn see if there are any other employer-paid taxes you must pay and include on employee pay stubs.

Net pay

Net pay, or take-home pay, is the amount left over after subtracting taxes và deductions from the employee’s gross pay. If the employee receives nontaxable income, include that income after subtracting all taxes & deductions.

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After subtracting taxes and deductions, you have sầu the employee’s take-trang chủ pay. The net pay is the total amount you pay the employee.

Include both the pay period net pay and year-to-date net pay on the kiểm tra stub.

What are pay stubs used for?

A pay stub includes information both employers and employees can use.

Employees receive sầu pay stubs as records of their wages. By reviewing their pay stubs, employees can make sure they were paid correctly & understand their deductions.

Employers can use pay stubs khổng lồ settle discrepancies with employee pay. If there is a question about an employee’s pay, you might need khổng lồ solve sầu the issue by looking at the payroll stub. You can also use check stubs lớn fill out each employee’s Form W-2 during tax time.

Do I have khổng lồ give pay stubs to lớn my employees?

Some states require employers khổng lồ provide pay stubs. The information you must include on a paykiểm tra stub can also vary by state.

You can give sầu your employees an electronic (e-paystub) or paper pay stub. If you use payroll software, you may be able to lớn give sầu employees access to lớn their pay stubs online through a portal. Keep a copy of each payroll stub for your employee payroll records.

For more information about pay stub requirements by state, consult your state.

Pay stub example

Phew, now you know what information to include in a pay stub. But, you might be wondering, “What does a pay stub look like?” Chechồng out an example of a pay stub:

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Take note of the parts of an employee pay stub:

Employee namePay period & dateHours workedGross payDeductionsTaxesEmployer contributionsDirect deposit informationNet pay

Understanding check stub information

Understanding information on a pay stub can help solve sầu issues for you and your business. You should know how khổng lồ create and decipher an employee pay stub.

If an employee quits or is terminated, you might need khổng lồ pay them quickly. Knowing pay stub information makes the process smoother. The more familiar you are with the parts of a pay stub, the faster you can check for accuracy và pay employees.

Reviewing employee pay stubs can also bring mistakes lớn your attention. While looking over stubs, kiểm tra for correct pay rates, hours worked, and total earnings. If an amount seems unusually high or low, you can catch errors early to lớn avoid IRS penalties & conflicts with employees.

Want to learn more about pay stubs và your responsibilities? Cheông chồng out our FREE guide, Underst& Your Pay Stub Responsibilities.

Calculating an employee’s net pay should be a simple process. With Patriot’s online payroll software, you can easily enter hours worked, approve sầu payroll, & print pay stubs anywhere, anytime using a simple three-step process. Start your miễn phí 30-day trial today!

This article has been updated from its original publication date of August 17, 2015.