A pay stub is a document that details an employee’s earnings, deductions, and net pay for a specific pay period. This seemingly simple document holds significant power, as it not only serves as a record of payment but also aids in resolving any discrepancies that might arise. For the easiest way to create one yourself with all the required information, use our free pay stub generator—simply plug in the values and click the generate button.
As your small business grows, and you want to spend less time creating manual pay stubs altogether, consider using a payroll service like Gusto. In addition to offering pay stubs, it allows your employees to manage their account information online or via a mobile device and print their payroll documents. Sign up today and get one month free when you run your first payroll. Offer will be applied to your Gusto invoice(s) while all applicable terms and conditions are met or fulfilled.
Pay Stub Legal Considerations
While there is no federal law regulating or requiring pay stubs, it’s a good idea to use them. They can serve as a useful record-keeping tool, helping you meet state requirements for tracking hours worked and wages paid. Most states require you to use pay stubs in some form.
State Pay Stub Regulations
Forty-one states plus Washington, D.C., require employers to provide pay stubs to their employees, while the remaining nine—mostly states in the southeastern US—don’t require employers to provide pay stubs to employees at all. Regardless, providing a pay stub is good practice because it ensures you have solid backup information in the event of an audit.
Some states also mandate in what form employees must receive their pay stubs. Colorado, for example, requires that all pay stubs are provided in a printed or written form, while Hawaii allows employees to opt out of written/printed pay stubs to receive pay stubs electronically instead.
Use the map below to determine if your state requires you to provide pay stubs to your employees and in what form:
Pay Stub Information
In addition to if and how you must provide pay stubs, state law can also dictate the information you should include on a pay stub. Keep in mind that this is based on where your employee lives and works, so if you have remote workers, you’ll need to adhere to the pay stub laws of the state in which your employee resides.
Our free pay stub generator has all the needed information—but for guidance, pay stubs should generally include:
- Employee information: Name, address, and employee identification number, if you have one
- Pay period: Start and end dates or the end date only (depending on the state requirements)
- Hours worked: Not required by all states but a best practice because you have to track the information to ensure overtime is paid correctly
- Gross earnings: Hourly earnings, commission earnings, tips, and any earnings based on piecework
- Required taxes: Federal and state taxes, unemployment taxes, and local taxes (if any), as well as Social Security taxes
- Taxable deductions: Wage garnishments, remote work stipends, etc.
- Tax-free deductions: Health insurance; FSA, HSA, or 401(k) contributions; etc.
- Net pay: Amount the employee takes home after all deductions
- Time off balances: Vacation leave/PTO, sick leave (required in states like California and New York, which have mandatory paid sick time laws)
- Year-to-date totals: How much an employee has earned, contributed, and had deducted for their pay in the current year
Payroll software usually provides you with the most flexibility, since its pay stubs are formatted to work with businesses in most industries. The caveat is that you have to use the system to process payroll before a stub can be generated. Check our guide to the best payroll software and find one that fits your needs.
Pay Stub Retention
The United States Department of Labor (DOL) has no mandatory retention requirements for specific documents like pay stubs, but it does require that payroll information be retained for three years. Meanwhile, the IRS requires that tax documentation is retained for four years. Some states, like California, require employers to retain payroll documentation for six years.
Our state payroll guides break down everything you need to know about pay stubs—from whether or not they’re required, to what they need to include and how long you’re required to keep them on file. For all the details you may need, check out your state:
State Payroll Directory
Other Free Payroll Resources
If you find our free pay stub generator helpful, check out some of our articles with downloadable payroll templates.
Free Payroll Templates | Employee Expense Report Template | Tip Pooling Template | Time Sheet Templates | Pay Period Calendar Template | How to Do Payroll in Excel
We also offer online payroll calculators if you need help making payroll calculations for each pay stub field.
Gross Pay Calculator | Overtime Pay Calculator | FICA Tax Calculator | FUTA Tax Calculator | Time Card Calculator | PTO Accrual Calculator | Employee Mileage Reimbursem*nt Calculator
Pay Stubs Frequently Asked Questions (FAQs)
The frequency of issuing pay stubs largely depends on your company’s pay schedule. This could be weekly, every two weeks, twice monthly, or monthly. Regardless of the pay schedule, employees should receive a pay stub each time they’re paid.
You can certainly create your own pay stub template if you have the knowledge and resources to do so. However, using our free pay stub generator can save time and ensure you’re including all the necessary information for compliance.
If you’re generating pay stubs digitally, make sure to use a secure platform. If you’re using paper pay stubs, store them in a secure location and dispose of them properly when no longer needed.
Yes, a comprehensive pay stub should include both the current pay period earnings and deductions, as well as year-to-date totals. This provides employees with a clear picture of their earnings and deductions over time.
If you need to make a correction to a pay stub after it’s been issued, you should issue a new, corrected pay stub and clearly mark it as corrected. Be sure to document the change for your records and explain the correction to the employee.
Not providing pay stubs to employees can lead to legal issues since many states require pay stubs in some form. Even in states where it’s not required, it’s still a good idea to provide pay stubs to maintain transparency about pay and deductions. Failure to do so can lead to misunderstandings, mistrust, and potential disputes.
Bottom Line
When you first start your business, you may pay workers with handwritten checks or cash. If you’re not using a payroll service, it’s important to document all payments and any taxes and deductions withheld. Pay stubs are a great way to meet the DOL’s payroll document retention requirements, even if they aren’t required.
If your state requires you to provide pay stubs to your employees, consider using a payroll service. Gusto is a small business payroll software that calculates and files payroll taxes—federal, state, and local—pays employees through direct deposit or printed checks, and lets employees print their own payroll reports and pay stubs.
