How to make a pay stub, step by step

A pay stub (also called a pay statement or earnings statement) is the record that goes with a paycheck. It shows what the employee earned, what was taken out and why, and what was actually paid, both for this pay period and for the year so far. Making one is mostly arithmetic: gather the right details, work out gross pay, subtract taxes and deductions, then carry the totals forward.

Do you have to give employees a pay stub?

Not under federal law. The Fair Labor Standards Act requires employers to keep accurate records of hours worked and wages paid, but the Department of Labor says it does not require pay stubs. Many states do require a written or electronic wage statement each payday, and some list exactly what it must show. Check your state labor department's rules before you settle on a format.

Even where a stub isn't required, it's the simplest way to show an employee how their pay was worked out. It also gives both sides a record to check against the W-2 at the end of the year.

What a pay stub should show

• Employer details: the business name and address.
• Employee details: name, address, and usually an employee ID or the last 4 digits of the Social Security number (never the full number).
• Dates: the first and last day of the pay period, and the pay date.
• Earnings: each type of pay on its own line (regular, overtime, holiday, bonus), with hours and rate for hourly work.
• Gross pay: total earnings before anything is taken out.
• Taxes withheld: federal income tax, Social Security, Medicare, and any state or local income tax.
• Other deductions: pre-tax items such as a traditional 401(k) or health insurance, and after-tax items such as a Roth 401(k), a wage garnishment or union dues.
• Net pay: what the employee actually receives.
• Year-to-date (YTD) totals for each line.

That list covers what state wage statement laws most often ask for, and what anyone reading the stub (the employee, a lender, a landlord) expects to see. For what each line means from the reader's side, see how to read a pay stub.

Gather this information first

Step by step, with a worked example

The example is an hourly employee paid $25.00 an hour for 80 hours in a biweekly period, filing single with a standard 2026 W-4, working in Texas (which has no state income tax on wages), with no other deductions.

1. Work out gross pay. For hourly work, multiply rate by hours for each type of pay: 80 × $25.00 = $2,000.00. For salary, divide the annual amount by the paychecks in a year: $52,000 ÷ 26 is also $2,000.00. Non-exempt employees must get at least 1.5 times their regular rate for hours over 40 in a workweek. Overtime is counted per workweek, not per pay period, so an 80-hour biweekly period can still include overtime if one week ran to 45 hours.
2. Subtract pre-tax deductions. A traditional 401(k) lowers the wages used for income tax, but not for Social Security and Medicare. Health insurance through a cafeteria (Section 125) plan lowers both. The example has none, so taxable wages are $2,000.00.
3. Work out federal income tax. Employers use the tables in IRS Publication 15-T with the employee's W-4. For the example this comes to $156.15.
4. Work out Social Security and Medicare. Social Security is 6.2% ($124.00) and Medicare is 1.45% ($29.00). Social Security stops once the year's wages reach $184,500 (the 2026 wage base), and an extra 0.9% of Medicare is withheld on wages over $200,000 in a calendar year.
5. Add state and local tax. Texas has none. In most other states you use the state's withholding tables, and some states and cities add disability, paid leave or local income taxes.
6. Subtract after-tax deductions, such as Roth 401(k) contributions, garnishments or union dues. The example has none.
7. Work out net pay. $2,000.00 minus $156.15, $124.00 and $29.00 leaves $1,690.85.
8. Fill in year-to-date. Add this paycheck to everything paid earlier in the year. If this is the 10th biweekly paycheck at the same pay, YTD gross is $20,000.00.

The YTD column assumes the same pay every period. After a raise, a bonus or unpaid time off, YTD is the actual total paid so far, not this paycheck times the number of paychecks.

Making it with a pay stub generator

You can do all of this in a spreadsheet, but the tax tables, the wage base and the YTD carry-forward are where errors creep in. A generator such as the Paystub.biz paystub builder works out federal, state and common local taxes from the pay date and work state, carries YTD forward, and can make up to 52 stubs in one order. The first paystub walkthrough explains each step.

Common mistakes

• YTD that doesn't add up. Each stub's YTD must equal the previous stub's YTD plus this paycheck. The usual slips are counting the current paycheck twice, treating a new hire as if they were paid since January, and carrying last year's totals into January. See fixing YTD that looks wrong.
• Pay period dates that don't line up. Periods should follow on from each other with no gaps or overlaps, and match the frequency: a biweekly period is 14 days, while semimonthly periods usually run from the 1st to the 15th and from the 16th to the end of the month. The pay date is normally on or after the last day of the period.
• The wrong state. State income tax generally follows where the work is done. Pick the wrong work state and the stub shows the wrong tax, or a tax where there should be none. People who live in one state and work in another should check both states' rules.
• Mixing up biweekly and semimonthly. A $52,000 salary is $2,000.00 a paycheck biweekly but $2,166.67 semimonthly. More in biweekly vs semimonthly pay.
• Social Security that never stops. Once YTD wages pass the wage base ($184,500 in 2026), the Social Security line should be zero for the rest of the year.
• Missing overtime. Overtime hours belong on their own line at the overtime rate, not folded into regular hours.
• Figures that didn't happen. A stub has to record pay that was actually made, under a business name and logo you have the right to use. See using pay stubs legally.

Keep a copy

Employers must keep payroll records for at least three years under the FLSA recordkeeping rules, and keeping a copy of each stub with them makes questions easy to answer later. Employees should hold on to their stubs at least until they've checked them against their W-2, and longer if they may need to show their income.