What Is a Pay Stub?

What Is a Pay Stub?



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Anyone applying for a mortgage or a loan may need to show their most recent pay stubs. If you recently had an employee or independent contractor ask for one, you may be wondering, “What is a pay stub?”

That’s not surprising.

Full-time, W2 employees get a pay stub every time they get paid. But if you’re a business owner who frequently works with 1099 contractors, pay stubs may not be on your radar.

A pay stub is simply a record of how much you paid your employee or independent contractor, and on what date. Some employees and contractors need pay stubs for a variety of reasons. But many contractors are paid in cash, and this fails to leave a record of their pay. Additionally, if you pay via direct deposit, your payroll company may not offer digital pay stubs.

What Does a Pay Stub Look Like?

A pay stub provides a host of financial information that shows how much an employee is paid, how much of that money the employee keeps, and other details that help interested parties – such as banks underwriting loans – make an informed decision about the person’s employment status and income.

A pay stub typically shows the following information:

  • Employee’s name, address, and social security number
  • Employer’s name and business address
  • Gross earnings for that pay period
  • How wages are paid (salaried or hourly)
  • Hours worked
  • Withholding taxes
  • Exemptions
  • Any pre-tax deductions such as healthcare
  • YTD pay (gross and net)

In short, a pay stub includes all the details about an employee or contractor’s payment for any given pay period, as well as cumulative totals for the year.

How Pay Stubs Have Changed with the Times

Back when most employees were paid with paper checks, the pay stub would often come attached, which the employee would tear off and keep before cashing the check. Today, if an employee is paid via direct deposit, they may be able to access their pay stub online through the online payroll system. Some companies use tools such as Paystubs 365 to generate paystubs online.

The answer to, “What Is a Pay Stub” has evolved, but today’s digital documents still offer the same information as the pay stubs of yesterday. If your payroll company doesn’t provide pay stubs, or you pay your contractors in cash, you can generate pay stubs online at paystubs365.com.


 

  • 1
    Select your pay stub template.
  • 2
    Provide the information required.
  • 3
    Preview and pay.