What Is a Pay Stub?

The basic definition

A pay stub (also called a paycheck stub, pay slip, or earnings statement) is a document that shows the breakdown of an employee's pay for a given period. It accompanies a paycheck or direct deposit and details how gross pay was calculated, what was deducted, and what the employee actually received.

Pay stubs are the paper trail of payroll. They let employees verify their pay is correct, let employers document compensation, and give both parties a record for tax time.

What a pay stub shows

Every pay stub is organized around the same basic structure, even if the layout varies between employers.

Employer and employee information

The top of a pay stub identifies who issued it and who received it: employer name, address, and tax ID (EIN); employee name, address, and ID or last four digits of SSN.

Pay period

The pay stub covers a specific period — the start date, end date, and the date payment was made. Common pay frequencies include weekly, bi-weekly (every two weeks), semi-monthly (twice a month), and monthly.

Gross earnings

Gross pay is total earnings before any deductions. It is broken down by type: regular hours at the standard rate, overtime hours at the overtime rate, and any additional earnings such as bonuses or commissions.

Deductions

Deductions reduce the gross pay to arrive at net pay. They fall into two categories:

• Taxes: Federal income tax, state income tax, Social Security (6.2%), Medicare (1.45%), and any local taxes
• Benefits and other: Health insurance premiums, dental and vision, 401(k) contributions, FSA/HSA, union dues, wage garnishments

Net pay

Net pay is the amount the employee actually receives: gross pay minus all deductions. This is what hits the employee's bank account or appears on the physical check.

Year-to-date (YTD) totals

Most pay stubs include a column showing cumulative totals from January 1 of the current year through the current pay period. YTD figures are used to track annual earnings and verify W-2 accuracy at tax time.

Why pay stubs matter

Pay stubs serve multiple purposes beyond just confirming how much you were paid.

For employees

• Verify that your paycheck matches what you earned
• Confirm that the right deductions were taken (and not extra ones)
• Track YTD earnings for budgeting and tax planning
• Use as proof of income for loan applications, rental applications, or government programs

For employers

• Provide employees with a record of each payment
• Document payroll for audits and internal records
• Support tax filings and year-end W-2 reconciliation
• Comply with state pay stub laws (many states require them)

Pay stubs vs. W-2 forms

A pay stub covers one pay period. A W-2 is an annual summary of all wages and taxes withheld across the entire calendar year, issued by the employer by January 31 of the following year. Employees use their final pay stub of the year to verify that the W-2 amounts match.