What Is A Pay Stub, And What Does It Include?

You pay your employees for their work each month or pay period. If you directly deposit or provide a check to your employees, they can only see the net salary they take home.

This can raise questions about how you derived the net pay or what was deducted. That’s where you need pay stubs. These seemingly simple receipts ensure transparency across the board. Pay stubs become even more important when one considers that 93% of employees in the US are paid through direct deposit.

So without further ado, let’s see what a pay stub is and what it entails.

What is A Pay Stub?

A pay stub or paycheck stub is a receipt attached to the paycheck detailing an employee’s current salary and year-to-date amount. Employers attach a paper stub with physical paychecks. For direct deposits, they use digital pay stubs.

Here’s a demo pay stub generated by Paystubmakr:

 

 

Pay stubs allow employees to gain insight into their salary and compensation. It includes pay rate, year-to-date amount, pay per period, gross earnings, as well as deductions such as employee benefits and income tax.

It’s also an income-proof for employees if needed for a lease or car loan.

What Goes In A Pay Stub?

Pay stub includes some essential information regarding employee pay, such as:

Gross Salary

Gross salary or income is the pre-tax salary of an employee. It’s the total amount of income that an employee has earned over a period. Gross wages don’t include deductions such as state or Federal income tax or benefits.

Pay stubs should include the following minimum gross wage information:

· Additional income, like overtime

· Gross pay for year-to-date and individual pay period

· Accrued time off, like vacation days and sick leaves

· Regular pay rate

· Hours worked

Your state may also require additional information.

Generation Information

Paycheck stub includes general employee and employer information such as company name, company address, employee name, social security number, and address.

Income Deductions

Gross wage is the total income earned by an employee, but that’s not what they take home. Employers make certain deductions on gross wages that should be itemized on the paycheck stub.

Deductions include payroll and income tax deductions, employee benefit deductions, involuntary deductions, and voluntary deductions.

Employer Contribution

Employers are required to contribute to an employee’s compensation, such as savings plans, insurance premiums, or retirement plans.

Net Salary

The net salary is the final wage that an employee takes home. It is generated after all the deductions made to the gross pay.

 

Get pay stubs online with Paystubmakr – an online professional pay stub generator. You can create your own check stub in 5 minutes to include Federal and State tax deductions. Enter your information, get a preview, and download the stub.

Contact us today if you have questions as we're available 7 days a week during regular business hours and offer a money-back guarantee on the pay stubs you download if you're not satisfied.