A pay stub is an employer-issued record that details an employee's total earnings, deductions, and net compensation.
Each employee receives a new pay stub with each pay cycle, as pay stubs typically are generated concurrently with paychecks.
All employees receive a pay stub alongside their paychecks. The pay stub serves as proof of the deductions made from the employee's gross pay to arrive at the net amount.
Despite the fact that most states have laws mandating that employers send pay stubs to their employees, this is not the case on the federal level.
Paycheck stubs are also known as earnings statements, salary statements, and pay slips.
What Should Be Included in a Pay Stub?
A pay stub details an employee's earnings, deductions, and net pay at the end of the pay period. The numbers for this pay period and the year to date are separated into two columns.
The following are the standard components of a pay stub:
Name, SSN, and mailing address of the staff member
Data on the company you work for, including contact details
Typical Salaries for staff
Scheduled pay period dates
Income taxes paid at the federal, state, and local levels, and the employee's portion of the Medicare and Social Security taxes that are withheld or deducted at source.
Gross pay, which is the amount of money someone receives before any deductions, taxes, or contributions are made.
Medical and life insurance premiums are two examples of deductions.
Payments made by the worker, such as those made to a pension or savings plan.
Net pay, the amount of money left over after taxes, and other deductions have been taken from gross income.
Do Paychecks and Pay Stubs Mean the Same Thing?
A paycheck refers to the physical cheque that is issued to an employee as payment for their services. The worker can then deposit the check and get the money.
Most businesses now use direct deposit to transmit money to workers' bank accounts on payday.
An employee's pay stub is different from a paycheck or a payment. It's a little something you get with your paycheck. The employee may receive a hard copy or have access to it electronically.
When an employee receives their salary, they will also receive a pay stub detailing all deductions and contributions. There is a breakdown by pay period and a running tally for the current year.
How Do Pay Stubs Get Generated?
Pay stubs are typically generated automatically by payroll services. The information needed for a pay stub is entered into a free or paid payroll tool.
Companies used to create pay stubs by hand. Pay stubs may still be calculated and written by hand in some small businesses. This takes a lot of time and is prone to mistakes.
The pay stub generator generates a corresponding pay stub once the required information has been entered.
Smart software for business management can instantly calculate payroll and make pay stubs.
Does Law Require Pay Stubs to Be Issued by Employers?
There is no federal legislation mandating that employers in the United States provide employees with pay stubs, but several individual states do.
If your company operates in more than one state, you should contact each state's labor departments to learn the specifics of their regulations.
Regardless of whether or not your state mandates pay stubs, your employer is still required by federal law to preserve records of your hours and wages worked, and you have the right to see such documents upon request.