Payroll and Taxes

What Is A Pay Stub?

Hannah Rau
March 30, 2023
7 min read

What Are Pay Stubs: Everything You Need To Know

Whether you call it a pay stub, a paycheck, a pay slip, or something else, it’s a vital document for employers and employees. 

At PayStubs, we live and breathe all things pay stubs and payroll, which is why we’re eager to help you manage your payroll easier than ever before. And that starts with knowing the ins and outs of payroll documents.

With this critical document—a pay stub—employees know all the details of their paychecks – exactly how, when, and how much they got paid for their labor. Similarly, employers can use pay stubs to manage payroll costs better and ensure employees receive the promised wages.

As simple as the concept of a paycheck is, a lot goes into creating, storing, and distributing them. 

This article will explore the most helpful information surrounding the topic of pay stubs employers must be aware of to ensure all of their bases are covered. We’ll look at topics like what information is on a pay stub, what it looks like, and why it matters to employers and employees alike. 

What is a Pay Stub?

A pay stub is an electronic or physical document that records an employee's wages earned and deductions made throughout a specific period, among other important pieces of information.

Pay stubs are typically generated weekly or bi-weekly, each containing the details for that particular period.

What Information Goes on a Pay Stub?

Some employers may include additional information on the pay stub, such as year-to-date earnings or vacation time accrued.

Information on a pay stub varies and looks different from employer to employer. One of the reasons for the difference is that federal laws don't actually require employers to provide any specific information on pay stubs or to provide these documents in general.

That said, some states do require a written pay statement. And whether they are legally obligated to do so or opt to anyway, the information listed above is what they tend to include in the document.

With PayStubs’ payroll solution we make it easy for you to choose which information to include on your pay stubs, including employee information and salary information. 

Most business owners wisely choose to provide pay stubs even if they aren’t legally required. So, let's take a look at the benefits that come along with them.

Why Do I Need Pay Stubs?

Pay stubs serve both employees and employers—therefore, they are crucial documents for tracking and understanding payroll costs or income earned from a job.

So, even if you aren't legally required to provide pay stubs, it's still advantageous for you to do so. 

Here are a few reasons why. 

For employers, giving employees a written record of their wages provides them with necessary information about the payroll process and any tax deductions or withholdings that apply to them. Employees need this type of documentation to properly calculate their income tax returns or verify the validity of their paychecks.

And for your business, providing pay stubs protects you from potential legal issues surrounding incorrect payment or failure to document payroll processes accurately. Plus, having these documents on file can help decrease the chances of employees disputing payments, overtime hours worked, and other related matters.

Pay stubs are vital to keeping accurate records for your business. Having good records on file makes it easier to spot any discrepancies or errors that may have occurred throughout the payroll process.

Physical vs. Electronic Pay Stubs

Employers who provide their team members with pay stubs can issue them physically or electronically.

Physical pay stubs are traditionally printed on paper and included with an employee's paycheck when issued. These documents provide employees with an easy-to-read record of their wages for the period.

However, more businesses are turning to a user-friendly payroll software like PayStubs that allows them to manage their payroll electronically and virtually effortlessly. This method takes the guesswork and fuss out of payroll, significantly cutting back on the time and effort it takes to generate accurate payroll records.

Did we mention our payroll solution is tax-compliant and calculates federal, state, and local taxes into payroll? 

Employers can be confident in their key calculations and accurate payment records. With an electronic solution like ours, your employee pay stubs and payroll history live in one place for convenience and easy organization.

So, while physical or electronic pay stubs can do the trick, digital options are an increasingly popular, trustworthy, and time-saving choice.

How long should I keep employee pay stubs?

Whether you keep electronic or physical payroll records, you may be subject to specific laws and regulations for how long these records must be maintained.

As per the Fair Labor Standards Act (FLSA) and its record-keeping requirements, employers must keep payroll records for at least three years. Further, they must maintain payroll tax records (including unemployment taxes) for four years. 

What requirements does my state have about providing pay stubs?

Employees might need to keep these records even longer in some states, including New York. However, as a general rule, keeping these records beyond the bare minimum is wise, as you never know when you may need them for legal purposes.

It's important to find out about the unique requirements of your state and other regulatory bodies that you may be subject to. 

State Pay Stub Categories

In terms of pay stub requirements, states tend to fall into one of three categories:

  1. States with no pay stub requirements: No pay stubs are legally required. This is the case in Florida, Ohio, and Georgia.

  2. An access state: Employers must provide employees with access to a physical or electronic pay stub, not necessarily the pay slip. Illinois, Virginia, Utah, and New York are examples of access states.

  3. An access and print state. Employers can provide either electronic or paper stubs. California, Iowa, Maine, and Texas are examples of access and print states. However, if employers offer electronic stubs, they must provide their employees easy access to view or print them. 

Opt-in vs. opt-out states

Beyond these three categories, states may also be opt-in or opt-out.

In an opt-out state, employers must get their workers' permission before changing how they provide paycheck stubs. However, if employees wish to continue with the old system, companies must honor and comply with that desire.

On the other hand, in an opt-in state, employers are obligated to provide paper stubs unless an employee opts for the electronic version.

Pay Stubs for Remote or Overseas Contractors: Considerations

If you are an employer hiring remote employees, it's important to understand the pay stub requirements for those contractors. In some cases, this might mean getting professional advice.

However, you can rely on a comprehensive payroll solution like PayStubs. You can ensure all your contractors' pay stubs are compliant with the different regulations of each country and state.  

Whether your business has employees, contractors, or both, PayStubs makes it easy to pay them. Your business can add as many of each as you need—even team members living around the globe.

Final Thoughts: Everything You Need to Know About Pay Stubs

Pay stubs are an integral tool for protecting your business and providing employees with an accurate record of their wages earned and deductions made.

Understanding what information goes on a pay stub and why they are essential documents is key to any successful employer-employee relationship. With this knowledge, you can ensure all payroll processes run smoothly and accurately—while avoiding potential legal issues for incorrect documentation accidents. 

If you're ready to start creating pay stubs for your business, try PayStubs and experience first-hand how our user-friendly solution can help. With our easy-to-use interface and convenient payroll options, you'll easily be able to create legally compliant pay stubs to meet the requirements of each state or country in less time than ever before.

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