Pay Stub Meaning, Definition & Example

What is a pay stub? A pay stub, also called a paycheck stub or pay advice or salary slip, is a document given to employees by their employers that outlines their earnings for a specific pay period. In addition, it also shows details of taxes and deductions, besides net and gross earnings.

This helps employees clearly understand how their salary is calculated and what amounts are withheld, thereby providing transparency into their employee compensation. Similarly, a payment slip which also provides a detailed income breakdown of an employee’s pay and deductions.

How Employers Provide Pay Stubs?

A pay stub document can be issued as a physical attachment to a paper paycheck or provided digitally. In most cases, electronic pay stubs are emailed to employees or accessed through an online portal to verify direct deposit payments. It ensures pay stub compliance with applicable labor laws and regulations. Therefore, meeting its standard requirements regarding information disclosure and employee access.

Pay Stub Example

Company Name: ABC Tech Solutions Pvt. Ltd.
Company Address: 123 Business Street, Mumbai, Maharashtra, 400001
Phone: +91-22-12345678
Email: [email protected]

Employee Name: Priya Sharma
Employee ID: EMP1234
Designation: Software Engineer
Department: IT
Pay Period: 01 March 2025 – 31 March 2025
Pay Date: 31 March 2025

Earnings

Description	Amount (INR)
Basic Salary	₹40,000.00
House Rent Allowance	₹15,000.00
Special Allowance	₹5,000.00
Conveyance Allowance	₹2,000.00
Bonus (if any)	₹3,000.00
Total Earnings	₹65,000.00

Deductions

Description	Amount (INR)
Provident Fund (PF)	₹2,000.00
Professional Tax	₹200.00
Income Tax (TDS)	₹3,500.00
Health Insurance Premium	₹500.00
Total Deductions	₹6,200.00

Net Pay

	Amount (INR)
Net Salary (in-hand)	₹58,800.00

Bank Account No.: XXXX-XXXX-1234
Payment Mode: Bank Transfer
Date of Transfer: 31 March 2025

Frequently Asked Questions

Q1.	What is a pay stub?
Ans.	It is a document given by an employer that outlines an employee’s gross earnings, deductions, and take-home pay. It is, however, generated with each paycheck, so employees receive a new pay stub every time they are paid. This document is similar to a salary slip, which also provides a breakdown of earnings and deductions for the pay period.
Q2.	What information is included in a pay stub?
Ans.	1. It generally includes important information such as the employee’s name, address, and Social Security number, along with the employer’s name and address. 2. Additionally, it shows the pay period dates, the employee’s pay rate, and gross earnings before any deductions. 3. Furthermore, the stub details taxes withheld, including federal, state, and local income taxes (if applicable), as well as the employee’s share of FICA taxes like Social Security and Medicare. 4. It also includes deductions for benefits such as health and life insurance and contributions to retirement plans. 5. Finally, the net pay which is the actual amount the employee takes home, is clearly mentioned after all deductions are subtracted from gross earnings. To sum up, this is all part of the payroll documentation that helps ensure accurate record-keeping of employee earnings and deductions.
Q3.	Is a pay stub the same as a paycheck?
Ans.	No, these are not the same. A paycheck is the amount your employee receives, typically the net pay they can deposit if it’s a paper check. On the other hand, a pay stub provides a detailed breakdown of how that net pay was calculated, including gross wages and all deductions taken out. This highlights the key difference in the comparison of pay stub vs pay slip.
Q4.	Do employers have to provide pay stubs?
Ans.	In the U.S., no federal law says employers must provide this. But many states do require them. Each state has its own rules. Therefore, employers should check with state labor offices. Even if pay stubs aren’t required, the Fair Labor Standards Act says employers must keep records of hours and pay. Employees can ask for this information.
Q5.	How long should employers keep pay stubs?
Ans.	In the U.S., employers must generally keep them or payroll records for at least 3 years, although the exact duration can vary depending on federal and state laws.
Q6.	Can I generate pay stubs without payroll software?
Ans.	Yes, you can generate them without payroll software. You can manually create them using templates or online pay stub generators. Additionally, these tools allow you to input details like gross pay, deductions, and taxes to generate it. However, using payroll software can simplify the process, especially for managing taxes and ensuring compliance.
Q7.	Are pay stubs required for direct deposit?
Ans.	No, these are not required for direct deposit. To clarify, direct deposit is simply a method of transferring an employee’s earnings directly into their bank account.
Q8.	What’s the difference between opt-in and opt-out states for electronic pay stubs?
Ans.	In opt-out states, employers must obtain employee consent before changing the pay stub delivery method, and they must return to the previous method if the employee requests it. In contrast, in opt-in states, employers must provide paper pay stubs unless the employee specifically asks to receive them electronically.