Saturday, 23 Jan 2021
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What Are Pay Stubs? The Basics to Know

Did you know that 78% of workers live paycheck to paycheck? This is why it is especially important to get pay stubs right as an employer. The best way to ensure people are getting paid for their work is by understanding the question, “what are pay stubs?”

Read on to learn about the basics of pay stubs.

What Are Pay Stubs?

Knowing what are pay stubs is the same as knowing what a payslip and paycheck stub is. All of these words refer to the same thing. A pay stub is on a paycheck from an employer and outlines the payment details.

Pay Stub Information

You can learn how to read a pay stub by knowing what information goes on it. Pay stub information typically includes:

  • Personal employee information like name, social security number, and address
  • Name and address of the employer information
  • Pay period dates
  • Pay rate of the employee
  • Gross earnings, employee contributions, and deductions that get taken out
  • Health insurance or life insurance deductions
  • Net pay, otherwise known as the actual amount an employee takes home after taxes, deductions, and contributions

The uses of a pay stub differ if an employee gets paid hourly or by salary. For example, where gross earnings get stated, the hourly rate will be listed with the hours worked. For a salaried employee, the default number of hours is 40 a week.

Pay stub information will also include overtime if an employee is eligible. This portion of the pay stub will show the hours worked in overtime as well.

Bonuses can also be seen on a pay stub under gross earnings. Depending on the state you work in, additional information may be required. This could include something like sick leave.

State Requirements

A paycheck stub is not required by federal labor law. However, states have their own laws and regulations that may force an employer to provide an employee with a spy stub.

A state with no requirements like Florida or Alabama don’t have their own rules, so a paycheck stub is not necessary. An access state like Texas and Ohio makes employers provide a pay stub through paper or electronically.

There are also access/print states like Kansas and Indiana. These states tell employers they can provide a paper stub or an electronic one. The difference between this and an access state is that employees need an easy way to print their pay stubs if they get them electronically.

Lastly, there are opt-in and opt-out states. An opt-in state tells employers that they have to offer a paper stub unless an employee asks for an electronic one. An opt-out state requires employers to get permission from an employee about changing the way stubs get delivered.

The Ultimate Guide to Pay Stubs

Now that you have been guided through the question, “what are pay stubs?”, you can understand how they work, whether you are giving them out of receiving them.

Employers and employees need to be aware of the information on a pay stub and what the state requires. Don’t make mistakes when it comes to pay stubs by considering this guide.

Keep coming back for more articles with helpful guides!