Payroll tools and source-backed guidance
How to Prepare Employee Pay Statements: 2026 Review Guide
A source-backed review guide for preparing employee pay statements, checking payroll fields, and confirming federal, state, and local requirements.
Best Paystub Generator creates simulated earnings documents for lawful personal record-keeping. It does not verify employment or income and does not replace records issued by an employer or payroll provider.
Pay-statement content, delivery, access, consent, and retention rules vary by jurisdiction. This guide is a review checklist, not a substitute for a payroll system or legal advice.
Do You Have to Provide Pay Stubs?
It depends on the law that applies to the worker and employer. Do not rely on a static state list: rules change, and some distinguish between paper delivery, electronic access, consent, wage notices, and itemized statements.
Start with the relevant state labor agency and the U.S. Department of Labor's state labor office directory. A payroll professional or employment attorney can review requirements for a specific workforce.
What Must Be on an Employee Pay Stub?
Requirements vary, but these are common fields to review:
Core Payroll Fields
- Employee name and last 4 digits of SSN
- Employer name and address
- Pay period (start and end dates)
- Pay date
- Gross earnings
- All deductions itemized
- Net pay
- Hours worked (hourly employees)
- Pay rate
Fields That May Be Required or Useful
- YTD totals (California, New York, and others)
- Overtime breakdown (California, New York)
- Vacation/PTO balance (California)
- Employee ID number
Step-by-Step: Creating Employee Pay Stubs
Step 1: Classify Your Employees
Before calculating pay, ensure proper classification:
| Classification | Overtime? | Min. Wage? | Benefits? |
|---|---|---|---|
| Full-time W-2 | Yes (hourly) | Yes | Typically yes |
| Part-time W-2 | Yes (hourly) | Yes | Varies |
| Salaried exempt | Depends on the applicable exemption | Must meet every applicable test | Varies |
| Independent contractor | Employee overtime rules generally do not apply | Classification must be correct | Contract-specific |
Classification depends on the facts and may differ under federal tax, wage-and-hour, state, and benefits rules. Start with the IRS worker-classification guidance and the applicable labor agency.
Step 2: Calculate Gross Pay
Hourly employees:
Salaried employees:
Step 3: Calculate Tax Withholdings
The following items commonly appear in payroll calculations. Their application depends on the worker, employer, elections, wage base, and jurisdiction:
| Tax | Rate | Basis |
|---|---|---|
| Federal income tax (FIT) | Based on W-4, brackets | Gross pay minus pre-tax deductions |
| Social Security | 6.2% | Gross pay (up to $184,500) |
| Medicare | 1.45% | All gross pay |
| State income tax | Varies (0-13.3%) | Depends on state |
| Local taxes | Varies | City/county dependent |
Use the paycheck calculators only for review estimates. Employers remain responsible for current withholding, filing, deposit, wage-statement, and local requirements.
Step 4: Apply Deductions
Common employee deductions:
- Health insurance premiums (pre-tax)
- 401(k) contributions (pre-tax)
- HSA/FSA contributions (pre-tax)
- Union dues (post-tax)
- Garnishments (court-ordered, post-tax)
Step 5: Calculate Net Pay
Step 6: Generate the Pay Stub
Authorized employers can use the draft workspace to organize payroll fields, but must verify the result against their payroll system, current federal and state rules, and any local requirements. The workspace does not file returns, deposit taxes, or guarantee compliance.
Employer Tax Obligations (Your Side)
Beyond what you withhold from employees, you also pay:
| Tax | Rate | Notes |
|---|---|---|
| Employer SS match | 6.2% | Matches employee withholding |
| Employer Medicare match | 1.45% | Matches employee withholding |
| FUTA (federal unemployment) | 0.6% | First $7,000 of wages per employee |
| SUTA (state unemployment) | 0.5%–5.4% | Varies by state and experience rating |
Employer cost can also include unemployment taxes, workers' compensation, benefits, leave, payroll services, and state or local assessments. Use current IRS Publication 15, the applicable state agencies, and the employer's actual experience rates.
Pay Stub Templates for Small Businesses
Different industries have different needs. BestPaystubGen offers templates for:
- Retail — handles hourly + tips
- Construction — overtime tracking, per diem
- Restaurant — tip reporting, split shifts
- Healthcare — shift differentials
- Office/Professional — standard salaried
Common Mistakes Small Business Owners Make
- Omitting required fields — wage-statement requirements vary by state
- Calculating overtime wrong — federal law requires 1.5× for hours over 40/week (some states have daily OT)
- Missing state-specific deductions — California SDI, New Jersey FLI, etc.
- Using one retention period for every record — federal and state periods differ by record type
- Using an unreviewed process — every statement should reconcile with payroll and payment records
Digital vs. Paper Pay Stubs
| Feature | Paper | Digital |
|---|---|---|
| Employee access | Must physically distribute | 24/7 self-service |
| Record keeping | Filing cabinets | Cloud storage |
| Cost | Printing + paper | Minimal |
| State requirements | Content and delivery rules vary | Access and consent rules can vary |
| Security | Risk of loss/theft | Password protected |
Frequently Asked Questions
How often do I need to provide pay stubs?
Every pay period. If you pay employees bi-weekly, they should receive a pay stub with each bi-weekly paycheck.
Can I handwrite pay stubs?
Format alone does not determine compliance. Use a process that includes every required field, preserves payroll records, protects sensitive data, and gives the worker any access required by state law.
What happens if I don't provide pay stubs?
Consequences vary by jurisdiction and can include statutory penalties or claims. Check the current state rule and obtain legal or payroll advice when needed.
How long must I keep pay stub records?
Federal and state retention periods differ by record type. Review the current DOL recordkeeping guidance, IRS employment-tax record rules, and applicable state requirements.
Can employees request old pay stubs?
Access rights vary by state and employer policy. Maintain retrievable records and follow the current rule for the worker's jurisdiction.
Prepare an authorized payroll draft for review → Open the workspace