A pay stub is a document associated with an employee's paycheck, providing detailed information about their earnings for a specific pay period. Also known as a pay slip or paycheck stub, it outlines various details such as the amount of gross pay, deductions for taxes and other benefits, and the net pay, or take-home pay, after these deductions.
A pay stub and a paycheck are integral parts of an employee's compensation, yet they serve different purposes. The paycheck, whether in the form of a physical check or a direct deposit, is the actual payment that an employee receives for their work during a specified period. It represents the net pay after all deductions. On the other hand, a pay stub is a detailed document accompanying the paycheck. It breaks down the payment details, including gross pay, various deductions such as taxes and insurance premiums, and the final net pay. While the paycheck is the tangible or electronic transfer of funds to the employee, the pay stub acts as a comprehensive record of how that payment amount was determined, crucial for both understanding one’s earnings and for financial verification purposes like loans or rentals.
The provision of pay stubs varies by U.S. state laws. While there's no federal mandate, the Fair Labor Standards Act (FLSA) requires employers to maintain payroll records. Certain states do not mandate issuing pay stubs, including Alabama, Arkansas, Florida, Georgia, Louisiana, Mississippi, Ohio, South Dakota, and Tennessee.
Employees are advised to keep pay stubs for at least a year for verification against IRS Form W-2 and Social Security statements. Electronic statements are more convenient for longer retention.
Under the FLSA, employers must ensure employees can access their pay stubs. This can be in physical or electronic format, with state-specific regulations governing the mode of access.
