Pay Stub Definition
A pay stub (also called a paycheck stub, pay slip, or earnings statement) is a document that shows a detailed breakdown of an employee's earnings and deductions for a specific pay period. It accompanies a paycheck and provides proof of income and employment.
Quick Definition: A pay stub is your receipt for getting paid. It shows how much you earned (gross pay), what was taken out (taxes and deductions), and how much you actually received (net pay).
Even if you receive direct deposit, you should still receive a pay stub—either as a paper document or electronic version. This document is essential for understanding your earnings, tracking your income, and proving employment for loans, rentals, or other applications.
What Information is on a Pay Stub?
A typical pay stub includes the following key information:
Employee Information
Your name, address, Social Security number (last 4 digits), and employee ID number.
Employer Information
Company name, address, and employer identification number (EIN).
Gross Pay
Your total earnings before any deductions. Includes base salary, overtime, bonuses, and commissions.
Deductions
Money withheld from your gross pay, including:
- Federal Income Tax - Withheld for IRS
- State Income Tax - Varies by state (some states have none)
- Social Security Tax - 6.2% up to wage base limit
- Medicare Tax - 1.45% (plus 0.9% for high earners)
- Health Insurance - Your premium contribution
- 401(k)/Retirement - Pre-tax or Roth contributions
- Other - Life insurance, HSA, FSA, garnishments, etc.
Net Pay
Your take-home pay after all deductions. This is the amount deposited into your bank account or on your physical check.
Pay Period & Pay Date
The date range you worked (e.g., 12/1/2025 - 12/15/2025) and the date you received payment.
Year-to-Date (YTD) Totals
Running totals from January 1st to current pay date for earnings, taxes, and deductions. Critical for tax filing and income verification.
How to Read Your Pay Stub
Understanding your pay stub helps you verify you're being paid correctly and manage your finances better. Here's a simple breakdown:
Simple Formula:
Step 1: Check Your Hours & Rate
Verify the hours worked match your records. If you're hourly, multiply hours × rate to confirm gross pay. Check for overtime (usually 1.5× your regular rate).
Step 2: Review Gross Pay
This is your total earnings before anything is taken out. Should match your agreed salary or hourly rate × hours.
Step 3: Understand Deductions
Taxes are required by law. Voluntary deductions (401k, insurance) should match what you signed up for. If something looks wrong, contact HR immediately.
Step 4: Verify Net Pay
This should match the deposit in your bank account. It's what you actually received after all deductions.
Step 5: Check YTD Amounts
Year-to-date totals should increase with each paycheck. These numbers are important for tax filing and prove your annual earnings.
Types of Pay Stubs
📄 Paper Pay Stubs
Traditional physical documents provided with paper checks or handed out with direct deposit.
💻 Electronic Pay Stubs
Digital versions accessed through employee portals or sent via email as PDFs.
History of Pay Stubs
Pay stubs originated during the Industrial Revolution in the late 1800s when factories and large companies began hiring thousands of workers. Before this, most workers were paid in cash with little to no paperwork.
In the early 1900s, as payroll systems became more complex, companies needed better record-keeping. The first pay stubs were simple handwritten receipts showing the amount paid.
The Social Security Act of 1935 made pay stubs essential by requiring employers to withhold taxes and track earnings. This created the modern pay stub format we use today, showing gross pay, deductions, and net pay.
Today, automated payroll systems generate pay stubs digitally, making them more accurate and accessible. Despite technology changes, the core purpose remains: providing employees with transparent documentation of their earnings.
When Do You Need Pay Stubs?
Pay stubs serve as proof of income and employment in many situations:
Common Pay Stub Questions
Is my employer required to give me a pay stub?
It depends on your state. Most states require employers to provide pay stubs, but the format varies (paper vs. electronic). Check your state's labor laws for specific requirements.
How long should I keep my pay stubs?
Keep pay stubs for at least 1 year. Many experts recommend keeping them for 3-7 years for tax and legal purposes. If you're buying a home or applying for loans, you'll need recent stubs (30-60 days old).
What's the difference between gross pay and net pay?
Gross pay is your total earnings before any deductions.Net pay is your take-home amount after taxes and deductions are subtracted. Net pay is what actually gets deposited to your bank account.
Can I create my own pay stub?
Yes, especially if you're self-employed, a contractor, or need documentation quickly. JustPayStubs creates professional, accurate pay stubs with proper tax calculations that are accepted by lenders and landlords.