Getting Paid: What Is a Pay Stub and What Goes On Them?

More than 80 percent of American workers receive their pay via direct deposit these days. Workers enrolled in direct deposit rarely give their check stubs a second glance. They may not even give them a first glance!

This casual attitude is understandable but can leave workers at a disadvantage. Read on now for the important and surprising answers  to the questions “what is a pay stub?” and “what can it tell me?” 

What Is a Pay Stub?

What are pay stubs? A paycheck stub is hardcopy proof:

• That you were employed at the time the stub was issued
• Of how much you were paid
• Of what types of pay you received
• How much was withheld from your paycheck and why

Paystubs are issued with regular employee paychecks and to employees using direct deposit. Employees who do not receive check stubs from their employers often turn to a free paystub generator to create their own paystubs. 

What Information Do Check Stubs Contain?

Understanding pay stubs can sometimes take a little work. Exact paystub design can vary from company to company. At a minimum, however, all paystubs show:

• Basic employer information such as the company name and headquarters address
• Your identifying information such as name, address of record, and social security number
• The dates of the pay period covered by the check or deposit
• Your gross wages and how they were calculated
• All deductions and withholdings
• Your net pay

Gross Wages 

Your check stub will show how your pay for the period was calculated. This may involve citing your salary and commissions or listing the number of hours you worked and at which rates. The stub will show your total gross rate before deductions, both for the pay period and year-to-date. 

Deductions

Paystubs also delineate what monies were withheld from your check and why. Typically this includes withholdings for Social Security, unemployment, insurance, and taxes. It will also include other figures such as union dues or wage garnishments where applicable. 

Net Pay

Finally, the paystub will show your net pay after all deductions have been removed. This is the actual amount of money deposited into your account or for which your paycheck can be cashed.

Why Are Paystubs Useful?

Why do employers still issue paystubs in our modern digital age? What good are they? 

Paystubs are primarily used as legally accepted proof of employment and income. Credit lenders often demand to see paystubs when workers apply for a loan, for example. Similarly, landlords may require check stubs as proof of employment before renting or leasing property or apartments to applicants. 

Freelancers use the information on paystubs to file their quarterly taxes. Workers of every kind can use their pay stubs to verify that:

• They are being paid correctly
• The correct withholdings are being taken out
• Their employers have all the correct information on file for them

Making the Most of Your Paystub

What is a pay stub? A valuable tool you can use to help you control and make the most of your money. Check out our other great business and finance articles to learn more about how to handle your money well!