How to Make a Pay Stub for Small Business Employees
How to make a pay stub for small business employees: a line-by-line build of the employer block, employee block, earnings, deductions, YTD columns, and net pay.
You paid your employee. Money moved. That part felt like the finish line.
It isn’t. A payment is a transaction. A pay stub is the record of that transaction, and in most states the record is the part the law actually cares about.
Here is what belongs on it, block by block, with a worked example carried all the way to net pay.
What a pay stub actually is (and what it isn’t)
A pay stub, or wage statement, or earnings statement (all the same document) is the itemized record of one payment, to one worker, for one pay period. It says what was earned, what was taken out, and what was left.
It is not a paycheck, and it is not a W-2, which is the annual summary filed with the IRS. It is also not a payroll calculator.
That last distinction trips up small employers constantly. A paycheck calculator takes gross pay and tax tables and predicts take-home. A paystub builder takes what you actually paid and turns it into a document. If you already know the numbers, because you ran payroll, wrote a check, or sent a transfer, a tax engine solves a problem you don’t have. What you’re missing is a statement that itemizes what happened.
One more thing to know before you build anything: federal law does not require you to give an employee a pay stub. The FLSA requires you to keep payroll records (DOL Fact Sheet #21), not to hand one over. Delivery requirements come from your state, and most states have them.
The seven blocks of a pay stub
Every legitimate wage statement is the same seven blocks in the same order. Build them one at a time and the document assembles itself.
Block 1: the employer
Legal entity name (the one on your incorporation filing, not the DBA on your sign), business address, and your EIN.
Small employers get this wrong constantly. If your LLC is “Bellweather Holdings LLC” and you trade as “Bell’s Coffee,” the stub says Bellweather Holdings LLC. A wage statement carrying only a trade name is a statement an auditor cannot tie to a filed entity, and in California that alone is a defect under Labor Code § 226(a).
Block 2: the employee
Legal name, address, and an identifier. The identifier is where the second common mistake lives.
Do not put a full Social Security number on a pay stub. Use an internal employee ID, or the last four digits of the SSN, and nothing more. California explicitly requires this, and everywhere else it’s just basic sense: stubs get emailed, printed, left on desks, and photographed.
This block also carries the worker’s classification: W-2 employee, 1099 contractor, statutory employee, or owner/partner. That single field changes what the rest of the stub is allowed to contain. A W-2 employee’s stub carries withholding lines. A 1099 contractor’s record carries none.
Block 3: pay period, pay date, pay frequency
Three separate fields that people flatten into one.
The pay period is the range of work being paid for (say, June 1 to June 14). The pay date is when the money actually landed, which is usually days later. The frequency (weekly, biweekly, semimonthly, monthly) is what makes the other two interpretable and what a lender uses to annualize the income.
A stub with a pay date but no period is a receipt, not a wage statement.
Block 4: earnings lines
Each type of earning gets its own line, with its own hours, rate, and amount. Not one lump “wages” figure.
- Regular: hours × rate
- Overtime: hours × 1.5 × regular rate, for non-exempt workers over 40 hours in a workweek (DOL overtime rules)
- Salary: annual salary ÷ pay periods per year
- Bonus, commission, reimbursement, tips: flat amounts
Two things each line needs. First, hours and rate shown separately, because a state auditor and a suspicious employee both want to recompute the amount themselves. Second, a taxable flag: a mileage reimbursement is money you paid, but it isn’t wages and it doesn’t feed the tax lines. Mixing those two up quietly corrupts every downstream total.
Block 5: deduction lines, in three buckets
This is the block that separates a real stub from a template someone downloaded.
Deductions fall into three categories, and the category determines when the money comes out:
| Bucket | Examples | Taken out |
|---|---|---|
| Pre-tax | Traditional 401(k), Section 125 health premiums, HSA, FSA | Before federal income tax is calculated |
| Tax | Federal income tax, Social Security (6.2%), Medicare (1.45%), state and local tax | On the taxable wage base |
| After-tax | Roth 401(k), union dues, garnishments, charitable giving | After all tax is calculated |
Order matters because pre-tax deductions shrink the wages that federal income tax is computed on. They do not shrink the wages that Social Security and Medicare are computed on, which is a subtlety almost every spreadsheet template gets wrong.
And itemize. One line reading “Taxes: $302.79” is not an itemized wage statement. Each tax gets its own line, with its own YTD column.
Block 6: employer contributions, adjustments, and leave
The block the internet forgets entirely.
Employer contributions are amounts you paid that never touched the employee’s net: the 401(k) match, the employer share of health premiums, the employer half of FICA. They don’t reduce net pay, so people leave them off, but they belong on the stub because they’re part of what the job actually pays.
Adjustments are corrections: an advance being recovered, a prior-period underpayment being made up, an expense reimbursement.
Leave balances are PTO or sick time accrued, used, and remaining. Some states (California among them, for paid sick leave) require the balance to appear on the stub or a document issued with it.
Block 7: YTD columns and the arithmetic
Every earning line and every deduction line carries a second number: the running total from January 1 through this pay date.
Employees need YTD figures for mortgage applications, loan applications, and to sanity-check the W-2 in January. A stub without a YTD column is a stub that will get sent back by a lender. If you’re rebuilding those running totals from a stack of past stubs, the YTD earnings calculator will do the adding for you.
Then the arithmetic, which is the only part that is genuinely simple:
Gross earnings − total deductions = net pay
And net pay must equal, exactly, the amount that hit the bank.
The field checklist
| # | Field | Required by |
|---|---|---|
| 1 | Employer legal name + address | Most states; § 226(a)(8) in CA |
| 2 | Employer EIN | Best practice |
| 3 | Employee legal name | Most states |
| 4 | Employee ID or last 4 of SSN (never the full number) | § 226(a)(7) in CA |
| 5 | Worker classification | Best practice |
| 6 | Pay period start and end dates | § 226(a)(6) in CA |
| 7 | Pay date | Most states |
| 8 | Gross wages earned | § 226(a)(1) |
| 9 | Total hours worked (non-exempt) | § 226(a)(2) |
| 10 | Hourly rates and hours at each rate | § 226(a)(9) |
| 11 | Each deduction, itemized | § 226(a)(4) |
| 12 | Net wages earned | § 226(a)(5) |
| 13 | YTD totals per line | Best practice; needed for lending |
| 14 | Leave balances | Some states |
A worked example: one hourly employee, one biweekly period
Numbers make this concrete. Meet Dana: non-exempt, $22.00/hour, biweekly, working an 80-hour period plus 6 hours of overtime.
Earnings
| Line | Hours | Rate | Amount |
|---|---|---|---|
| Regular | 80.00 | $22.00 | $1,760.00 |
| Overtime | 6.00 | $33.00 | $198.00 |
| Gross | $1,958.00 |
Overtime is $22.00 × 1.5 = $33.00. The regular rate times 1.5, not the base rate plus a half-hour bonus, and not time-and-a-half of some blended figure.
Deductions
| Line | Bucket | Amount |
|---|---|---|
| 401(k) traditional (5%) | Pre-tax | $97.90 |
| Federal income tax | Tax | $151.00 |
| Social Security (6.2%) | Tax | $121.40 |
| Medicare (1.45%) | Tax | $28.39 |
| State income tax | Tax | $73.00 |
| Union dues | After-tax | $15.00 |
| Total deductions | $486.69 |
Gross $1,958.00 − deductions $486.69 = net pay $1,471.31.
A few lines in that table are doing real work.
Social Security is 6.2% of $1,958.00, not of the post-401(k) figure. Elective deferrals reduce federal income tax wages but not FICA wages. So the federal withholding line runs off $1,860.10 ($1,958.00 − $97.90), and the exact dollar figure depends on the employee’s Form W-4 and the Pub 15-T tables. Social Security and Medicare, meanwhile, are computed on the full $1,958.00. The $151.00 and $73.00 above are illustrative; yours will differ.
The Social Security line stops eventually. For 2026 the taxable wage base is $184,500 (SSA), up from $176,100 in 2025. Once an employee’s YTD Social Security wages cross that, the 6.2% line goes to zero for the rest of the year. Medicare never stops, and adds 0.9% above $200,000 in wages (IRS Publication 15). If you see a “2026” pay stub guide still printing the 2025 base of $176,100, you are reading last year’s article with a new date on it.
And then there’s the rounding. $1,958.00 × 0.062 = $121.396. You round to $121.40. Fine. But do it in a spreadsheet with floating-point math and the stored value is something like 121.39599999999999, and when you total the deduction column, the sum is off by a cent from the sum of what’s displayed. One cent, on one stub, is nothing. One cent across twelve employees and twenty-six pay periods is a reconciliation you will spend a Saturday on. Money should be computed in decimal arithmetic, not binary floating point. Payslip44 does the whole document in decimals for exactly this reason, which is unglamorous and turns out to matter.
What your state actually requires
Federal law sets the floor, and the floor is low: keep the records, no statement required. Everything above that is state law, and the states fall into rough categories.
| Category | What it means | Examples |
|---|---|---|
| No requirement | No wage statement required at all | AL, FL, GA, and a handful of others |
| Access | Employee must be able to view the statement | Many states; electronic-only is generally fine |
| Access + print | Employee must be able to view and print it | Common electronic-delivery standard |
| Written / printed | A physical or printable statement, unless the employee opts in to electronic | CA, CO, CT, IA, ME, MA, NM, NC, TX, VT, WA |
Around forty states require a statement in some form. About ten require none. Because these rules get amended, confirm against your own state labor department rather than any article, including this one.
California is the strict end, and it is instructive even if you’re nowhere near it. Labor Code § 226(a) enumerates nine items that must appear on every wage statement. Miss them and § 226(e) sets damages at $50 for the first violation, $100 per employee per subsequent pay period, capped at $4,000 aggregate, plus costs and attorney’s fees.
Do the multiplication on a five-person shop paid biweekly for a year and you get to the cap quickly. A wage statement is cheap. A defective one is not.
Four ways to produce the stub
| Method | Good for | The catch |
|---|---|---|
| Spreadsheet template | Free; fine for one employee | Floating-point drift, no template reuse, no audit trail, easy to omit a required field |
| Full payroll service | You want tax filing and deposits too | $40–$150/month; overkill if you only need the document |
| Web paystub generator | Fast, browser-based | You are typing an employee’s name, address, SSN digits, and wages into someone else’s server |
| On-device builder | You already know what you paid and need the document | No tax filing; it records, it doesn’t calculate withholding for you |
Be honest with yourself about which problem you have. If you need someone to compute withholding, file your 941, and make the deposits, buy real payroll software. That is what it is for and it is worth the money.
But a lot of small employers already know their numbers. They run payroll through a bank product, or they pay a part-timer by check, or their accountant hands them the withholding figures each period. What they lack is the document. Buying a $100/month payroll suite to solve that is like buying a car to move a couch.
That fourth row is where Payslip44 sits. It builds the stub as a document, on the phone, with reusable employer, employee, and item templates so period two takes thirty seconds instead of ten minutes. Four worker classifications, six layouts, and export to PDF, PNG, CSV, or text depending on who is receiving the file. Nothing leaves the device, which means no employee’s SSN digits get typed into a form on a server you know nothing about.
Six mistakes small employers make
Printing the full SSN. Last four digits, or an employee ID. Never the whole number.
Skipping the YTD columns. Your employee will discover this at the worst possible moment, in a mortgage broker’s office.
One line that says “Taxes.” Itemize. Federal, Social Security, Medicare, state, local: separate lines, separate YTDs. A lumped tax line is the single most common defect in a homemade stub.
Using the DBA instead of the legal entity name. See Block 1.
Net that doesn’t match the deposit. If the stub says $1,471.31 and the transfer was $1,471.30, you have a rounding bug, and it will recur every period until you fix the arithmetic.
Putting withholding lines on a contractor’s record. You don’t withhold from a 1099 contractor, so their payment record shows gross paid and nothing else. A stub that deducts Social Security from a contractor is either a clerical error or an argument that the person was never a contractor at all.
And keep them. The FLSA wants three years of payroll records, and two years of the underlying computation records: time cards, wage-rate tables, and records of additions to or deductions from wages.
The short version
Seven blocks: employer, employee, period, earnings, deductions, contributions, totals. Itemize everything, carry the YTD column, keep the full SSN off the page, and make sure the net matches the deposit to the cent.
Do that and you have a wage statement that survives an employee’s question, a lender’s review, or a state audit. Skip it and you have a receipt.
Payslip44 builds it line by line, on-device, with templates that make the next pay period a thirty-second job. Download it, or browse the rest of the blog first.
Frequently Asked Questions
Is it legal to make your own pay stubs for employees?
Yes. Nothing prohibits an employer from producing its own wage statements, and payroll software is doing exactly that on your behalf. What is illegal is falsifying one: inflating income on a stub to deceive a lender, a landlord, or an agency is fraud. Accuracy is the whole line.
Are employers required to provide pay stubs?
Not under federal law. The FLSA requires you to keep payroll records, not to hand a statement to the employee. But most states require a wage statement with each payment, and around ten (Alabama, Florida, and Georgia among them) require none. Check your state labor department.
What has to be on a pay stub?
At minimum: employer legal name and address, employee name and identifier, pay period dates and pay date, gross wages, hours and rates, each deduction itemized, and net pay. Strict states like California also require total hours worked and allow only the last four digits of the SSN.
Do 1099 contractors get pay stubs?
They are not legally entitled to one, and you withhold nothing from them, so a contractor payment record should carry no tax-withholding lines at all. Contractors often want one anyway for loans, leases, and rental applications, and many produce their own from what they were paid.
How do I calculate gross pay for a pay stub?
Hourly: regular hours times rate, plus overtime hours at 1.5 times the regular rate for anything over 40 in a workweek. Salaried: annual salary divided by the number of pay periods. Then add bonuses, commissions, and any flat-amount lines.
What is the difference between gross pay and net pay?
Gross is everything earned before anything comes out. Net is what actually lands in the bank: gross minus taxes, pre-tax deductions, and after-tax deductions. The net on the stub has to match the deposit or the check exactly.
What does YTD mean on a pay stub?
Year-to-date. It is the running total for each earning and deduction from January 1 through the current pay date. Employees rely on YTD figures for mortgage and loan applications, and it is what they reconcile against the W-2 in January.
How long do I have to keep pay stubs and payroll records?
The FLSA requires three years for payroll records, and two years for the records the wage computations were based on, such as time cards, wage-rate tables, and records of additions to or deductions from wages. Some states require longer.
What is the difference between a paystub generator and a payroll calculator?
A calculator derives take-home pay from tax tables, which is useful before you pay someone. A paystub builder records what you actually paid, as an itemized document. If you already run payroll, or you pay by check or transfer, you do not need another calculator. You need the statement.