The Complete US Pay Stub Guide for Small Business Owners (2025)

Getting payroll right is one of the most important responsibilities for any US small business. Beyond paying employees on time and in full, you’re also expected to provide a pay stub (also called pay statement, pay advice, or wage statement) that clearly itemizes earnings, taxes, and deductions for each pay period.

This guide explains—clearly and practically—what a pay stub is, what it must include, how federal and state rules interact, and simple steps to produce professional pay stubs your employees and lenders can trust.

What Is a Pay Stub?

A pay stub is the itemized record of an employee’s earnings and deductions for a specific pay period. It typically accompanies a paycheck or direct deposit notice and includes current-period and year‑to‑date (YTD) totals.

Why it matters:

Employee transparency: shows hours, rates, taxes, and benefits in plain view.
Proof of income: needed for rentals, loans, and credit applications.
Audit trail: supports federal/state wage‑and‑hour compliance and internal controls.

Required Components (US Fundamentals)

While exact formatting can vary, a professional US pay stub almost always contains:

Employer information: legal name and mailing address (often FEIN is kept on file, not always printed).
Employee information: name and address; if SSN appears, show only the last 4 digits (e.g., *‑‑1234).
Pay period and pay date: period start/end, and pay date.
Earnings details: regular hours × rate, overtime hours × rate, additional earnings (bonus, commission, other), and gross pay.
Deductions: federal income tax (FIT), state income tax (SIT, where applicable), Social Security (6.2%), Medicare (1.45%), and other authorized deductions (health insurance, 401(k), garnishments, etc.).
Totals: net pay (take‑home), plus YTD gross, YTD deductions, and YTD net.

Tip: Itemize deductions line‑by‑line so employees can reconcile how net pay was calculated.

Federal vs. State: What Changes?

At the federal level, the Fair Labor Standards Act (FLSA) sets minimum wage, overtime, and recordkeeping rules, but it doesn’t prescribe a single pay‑stub format. That’s why states step in with their own requirements.

Common state differences you should be aware of:

Display requirements: Some states (e.g., CA, NY, MA) specify fields (hours, rates, YTD, employer address) and expect a “readable, itemized statement.”
Electronic delivery: Many states allow e‑pay stubs with employee consent and free access to a printable copy.
Local taxes: Certain localities impose additional taxes/withholdings that must be shown (e.g., some PA localities).

Practical approach:

Start from a general US template that includes the fundamentals and YTD lines.
Add state‑specific details (e.g., more granular hour/rate lines) where required.
Mask sensitive PII (last‑4 SSN), and keep full identifiers (SSN/FEIN) securely on file.

What a Pay Stub Should Not Include

Full SSN (use last‑4).
Unapproved deductions (anything not legally required or not authorized by the employee).
Vague “miscellaneous” lines—lenders and employees prefer clarity.

How to Calculate the Key Numbers (Simple Walkthrough)

Regular Pay = Regular Hours × Regular Rate.
Overtime Pay (most non‑exempt roles) = OT Hours × OT Rate (often 1.5× regular rate).
Gross Pay = Regular Pay + OT Pay + Bonuses/Commissions + Other Earnings.
Deductions = FIT + SIT (if applicable) + Social Security + Medicare + authorized benefits.
Net Pay = Gross Pay − Total Deductions.
YTD = Sum of each category across the year through this pay date.

Note: Actual FIT/SIT calculations depend on IRS/state tables, filing status, dependents, and pre‑tax benefits. For official payroll, use current tax tables or a certified provider.

State Nuances at a Glance (Examples)

California (CA): Labor Code §226 emphasizes itemization; show hours, rates, gross, deductions, net, and YTD. Employer legal name/address required.
New York (NY): Wage Theft Prevention Act (WTPA) requires clear pay statements and separate notices at hire and on changes.
Washington (WA): No state income tax; still itemize other deductions/benefits.
Massachusetts (MA): Standard itemization and pay frequency rules; ensure readability and YTD visibility.

Always verify the latest state guidance before finalizing your format.

Building Professional Pay Stubs: Options

Full‑service payroll software (Gusto, QuickBooks Payroll, ADP): most automated, includes tax filings and employee portals.
pay stub generator (like ours): fast, customizable, and ideal for clean, professional statements when you already handle calculations.
Manual spreadsheets: workable for very small teams but error‑prone; ensure consistent formulas and backups.

When to choose what:

If you need end‑to‑end payroll & tax filing, go full‑service.
If you already have correct numbers and want high‑quality, branded pay stubs, a generator is efficient.

Best Practices for Employers

Be consistent: same look/feel and line order each pay period.
Mask SSNs: last‑4 only on the stub; protect PII elsewhere.
Show YTD: lenders look for YTD totals.
Get e‑delivery consent: and let employees download/print for free.
Retain records: at least FLSA’s 3 years (state rules may require longer).
Educate staff: share a quick legend that explains each line.

Frequently Asked Questions

Is a pay stub legally required in every state?
No. A few states don’t mandate pay statements, but most do—and even when not required, providing a stub is considered best practice for transparency and lending needs.

Do I need to print pay stubs?
Not necessarily. Electronic pay stubs are widely acceptable with employee consent, but employees must be able to access and print copies at no charge.

Can contractors get pay stubs?
Independent contractors (1099) usually receive payment statements or invoices rather than employee pay stubs. Keep the formats distinct to avoid worker‑classification confusion.

What if I make a mistake?
Issue a corrected stub and, if needed, a payroll adjustment on the next run. Keep a clean paper trail for audits.

Generate US Pay Stubs in Minutes

If you need clean, professional US pay stubs right now, try our pay stub generator. It supports regular and overtime earnings, itemized deductions (FIT/SIT, Social Security, Medicare, benefits), and YTD totals—plus a PDF export your employees and lenders can rely on.

Start here: Pay Stub Generator

Run payroll with confidence—and give your team the clarity they deserve.