What is a pay stub?
A pay stub—also called a payslip or paycheck stub—is a document that gives employees a detailed breakdown of their earnings and deductions for a specific pay period.
It answers the important question: Where did my money go?
For employers, pay stubs serve as important payroll records and, in many states, are legally required. Whether you provide digital or paper pay stubs, making sure they’re clear, accurate, and compliant is essential.
Homebase Payroll provides clear and concise pay stubs for every paycheck.
Why do pay stubs matter?
Pay stubs aren’t just about showing employees their wages. They help businesses and workers in multiple ways:
- Transparency in payroll – Employees can see exactly how their earnings are calculated.
- Legal compliance – Some states require employers to provide detailed pay stubs.
- Proof of income – Employees may need pay stubs to apply for loans, rent an apartment, or file taxes.
- Accurate record-keeping – Employers need accurate payroll records for audits and tax filings.
Clear, detailed pay stubs build trust with employees and ensure payroll remains transparent.
What information should a pay stub include?
A well-structured pay stub typically has three key sections:
1. Employee and employer details
- Employee’s full name and address
- Employer’s name and contact details
- Pay period start and end dates
2. Earnings breakdown
- Gross pay – Total earnings before taxes and deductions
- Hourly rate & hours worked – For hourly employees, this includes regular and overtime hours
- Overtime pay – Extra pay for hours worked beyond standard full-time hours
- Bonuses or commissions – Any extra earnings added to the paycheck
3. Deductions and taxes
- Federal & state taxes – Withheld based on W-4 elections
- Social Security & Medicare (FICA taxes) – Employer and employee contributions
- Health insurance premiums – If the employee has coverage through the employer
- Retirement contributions – 401(k) or other plans deducted from earnings
- Garnishments – Court-ordered deductions for child support or debt repayment
The final amount after all deductions is the net pay—the amount that actually lands in the employee’s bank account.
Do employers have to provide pay stubs?
Federal law doesn’t require pay stubs, but many states do. There are three main types of state laws regarding pay stubs:
- Access states – Employers must provide pay stubs upon request.
- Mandatory states – Employers are required to provide pay stubs every pay period.
- No requirement states – Employers are not legally required to issue pay stubs.
It’s always a good idea to check your state’s laws to ensure compliance.
Should you offer digital or paper pay stubs?
Businesses today are moving toward digital pay stubs, which are more convenient, secure, and eco-friendly. However, some employees may prefer printed pay stubs for record-keeping. Offering both options ensures employees get what works best for them.
Common payroll mistakes to avoid
Even minor payroll errors can lead to big problems. Here are some common mistakes to watch out for:
- Incorrect tax withholdings – Employees may owe taxes if too little is withheld.
- Omitting overtime pay – Non-exempt employees must be paid correctly for overtime hours.
- Not keeping records – Employers should store payroll records for at least three years.
- Failing to provide pay stubs when required – Non-compliance with state laws can lead to fines.
Automated payroll software helps eliminate these mistakes and keeps payroll running smoothly. Hint—Homebase can help!
How Homebase makes payroll & pay stubs easy
Payroll doesn’t have to be complicated! Homebase Payroll helps small businesses manage pay stubs, payroll taxes, and compliance without the hassle. With Homebase, you can:
- Automatically generate and send digital pay stubs every pay period
- Ensure tax accuracy with automated calculations and withholdings
- Stay compliant with state payroll laws without worrying about missing details
- Make direct deposits easy, so employees always get paid on time