Pay Stub: What It Means for Employers

What it means in practice

A pay stub goes by several names. California calls it an "itemized wage statement," New York a "wage statement or pay stub," the federal H-2A rules "hours and earnings statements," and the federal farmworker law an "itemized written statement." Whatever the name, it shows how the employee's gross pay for one pay period turned into net pay. California's Labor Commissioner says the purpose of the requirement "is to provide transparency as to the calculation of wages," so an employee can check that pay and deductions are correct (DLSE Opinion Letter 2006.07.06).

The federal baseline. The Fair Labor Standards Act has no pay stub rule. The DOL's FLSA FAQ answers "Are pay stubs required?" this way: "The FLSA does require that employers keep accurate records of hours worked and wages paid to employees. However, the FLSA does not require an employer to provide employees pay stubs." The duty the FLSA does impose is recordkeeping: every covered employer must "make, keep, and preserve" records of wages, hours and other conditions of employment as DOL prescribes by regulation (29 U.S.C. 211(c)). No particular order or form of records is prescribed (29 CFR 516.1(a); DOL Fact Sheet #21). It also does not excuse compliance with any other federal, state or local recordkeeping or reporting law (29 CFR 516.1(c)).

What the FLSA payroll record must contain. For each employee covered by the minimum wage, or the minimum wage and overtime provisions, 29 CFR 516.2(a) lists identifying details (name, address, birth date if under 19, sex and occupation); when the workweek begins; the regular hourly rate in overtime weeks and the basis of pay; hours worked each workday and each workweek; total straight-time earnings; total overtime premium pay; total additions to or deductions from wages each pay period, with the dates, amounts and nature of each item in individual records; total wages paid each pay period; and the date of payment and the pay period covered. Many of these items are the same lines a pay stub prints.

Federal exceptions that do require a statement. The Migrant and Seasonal Agricultural Worker Protection Act requires farm labor contractors, agricultural employers and agricultural associations to give each migrant worker an itemized written statement for each pay period showing the basis of pay, piecework units, hours worked, total pay period earnings, each sum withheld and its purpose, and net pay (29 U.S.C. 1821(d)). The DOL regulation, which covers migrant and seasonal workers, requires it "no less often than every two weeks (or semi-monthly)," and adds the employer's name, address and EIN (29 CFR 500.80(d)). Employers of H-2A workers must furnish, on or before each payday, a statement of total earnings, hourly or piece rate, hours offered, hours actually worked, an itemization of all deductions, units produced daily if piece rates are used, the beginning and ending dates of the pay period, and the employer's name, address and FEIN (20 CFR 655.122(k)).

What a pay stub typically shows. Across the rules on this page, the recurring items are employee and employer identity, pay period dates, hours and rates, gross wages, each deduction and net wages. A year-to-date (YTD) column, when an employer includes one, adds up the same items for the calendar year so far. None of the rules quoted here requires YTD totals, but YTD figures show when the Social Security wage base and Additional Medicare Tax threshold are reached (examples below).

Federal deductions that commonly appear. IRS Publication 15 (2026) describes the taxes taken out of an employee's pay. Federal income tax is figured from the employee's Form W-4 using the procedures in Publication 15-T. For 2026, employee Social Security tax is 6.2% on wages up to the $184,500 wage base and Medicare tax is 1.45% with no wage base limit. The employer must also withhold 0.9% Additional Medicare Tax beginning in the pay period in which it pays an employee wages over $200,000 in a calendar year, and continue each pay period until year end; there is no employer share of that tax. The employer's matching Social Security and Medicare taxes are not deducted from the employee, and "only the employer pays FUTA tax; it isn't withheld from the employee's wages." Other lines may include voluntary payroll deductions such as retirement plan deferrals, pre-tax deductions for benefits, and court-ordered garnishments.

Example 1: reading a biweekly stub. A Remindax illustration with assumed numbers: a non-exempt employee earns $25 an hour and works 40 hours one week and 44 the next. Gross pay is $2,000 straight time plus 4 hours at $37.50 (1.5 times $25), or $150, for $2,150. Employee Social Security tax is $133.30 (6.2%) and Medicare tax $31.18 (1.45%, rounded). If the Pub 15-T tables produce, say, $150 of federal income tax for this employee's Form W-4 (an assumed figure), net pay before any other deductions is $1,835.52. The "half" portion of the overtime, 4 hours at $12.50 or $50, is the kind of amount the 2026 Form W-2 instructions describe as qualified overtime compensation for box 12, code TT, at year end.

Example 2: why year-to-date totals matter. Assumed numbers again: an employee's YTD Social Security wages are $180,000 before a $10,000 paycheck. Only $4,500 of that paycheck is under the $184,500 wage base, so Social Security tax is $279 (6.2% of $4,500) instead of $620. If the same employee's YTD Medicare wages were $195,000 before the paycheck, $5,000 of it is over $200,000, so Additional Medicare Tax of $45 (0.9%) starts in that pay period, on top of regular Medicare tax of $145 on the full $10,000 (Pub 15 rates).

Example 3: pay period versus pay date. An IRS example: if an employee worked December 13 through December 26, 2026, and the wages for that period were paid on January 1, 2027, those wages go on the 2027 Form W-2, because Form W-2 entries are based on wages paid during the calendar year (General Instructions for Forms W-2 and W-3, 2026).

How a pay stub relates to Form W-2. A pay stub covers one payment; Form W-2 is the separate annual statement the employer must furnish under 26 CFR 31.6051-1. For 2026 wages, the IRS says to furnish employee copies by February 1, 2027, and an employee who leaves and asks for one gets it within 30 days of the request or of the final wage payment, whichever is later. W-2 boxes do not always equal gross YTD pay: box 1 excludes elective deferrals such as employee 401(k) or 403(b) contributions, while box 3 shows wages subject to Social Security tax before payroll deductions, and boxes 3 and 7 together cannot exceed $184,500 for 2026 (W-2 instructions).

Electronic pay stubs. Because the FLSA does not require pay stubs, the electronic delivery rules come from state law. New York DOL says wage statements can be provided electronically, "but workers must be able to access their statements on a computer provided by the employer and be able to print a copy for their records" (WTPA FAQ). California's Labor Commissioner allows electronic wage statements so long as each employee keeps the right to elect a paper stub and can easily access the statements and convert them to hard copies at no expense, with records kept three years and accessible to current and former employees; the letter says it is not a safe harbor in private lawsuits (DLSE Opinion Letter 2006.07.06). Form W-2 has its own rule: an employer may furnish it electronically only if the employee has affirmatively consented and received required disclosures (26 CFR 31.6051-1(j)).

Where states differ. State law fills the federal gap, and requirements vary, so check your own state's labor department through DOL's state labor offices directory. Two examples follow; neither is a national rule.

Example state: California. Labor Code 226(a) requires the statement semimonthly or each time wages are paid, by check, cash or otherwise, as a detachable part of the check or a separate writing. The Labor Commissioner lists the required items: gross wages earned; total hours worked (not required for salaried exempt employees); piece-rate units and rates if paid by piece; all deductions (those made on the employee's written orders may be combined as one item); net wages earned; the inclusive dates of the pay period; the employee's name and the last four digits of the Social Security number or an employee ID; the name and address of the legal entity that is the employer; and all hourly rates in effect and hours worked at each. Overtime hours paid on the next payday may be recorded as a correction on the next regular statement, with the dates of the period corrected. Employers must show available paid sick leave on the pay stub or a document issued the same day as the paycheck, or "unlimited" where that applies (DIR Paid Sick Leave FAQ). Employees may inspect payroll records, the employer must comply within 21 calendar days, and failure lets the employee recover a $750 penalty (DIR Paydays FAQ).

Example state: New York. Labor Law 195(3) requires a statement with every payment of wages listing the dates of work covered, the employee's name, the employer's name, address and phone number, the rate or rates of pay and basis thereof, gross wages, deductions, allowances claimed as part of the minimum wage and net wages, plus regular and overtime rates and hours for non-exempt employees and piece rates for piece workers. On request, the employer must explain in writing how wages were computed. NY DOL says all pay rates must appear and retroactive increases must be noted separately for the period paid. Damages for missing statements run up to $250 per day per employee, capped at $5,000 per employee in civil lawsuits, unless the employer paid all wages required by law (NY DOL P715).

Recordkeeping and retention. Federally, payroll records are kept at least 3 years from the last entry, and time and earnings cards, wage rate tables and records of additions to or deductions from wages at least 2 years (29 CFR 516.5 and 516.6). The IRS says to keep all employment tax records at least 4 years, including amounts and dates of all wage payments, Forms W-4 and employee copies of Forms W-2 returned as undeliverable (Pub 15). Example states run longer or add copies: New York requires payroll records for six years (NY DOL P715), and California requires a copy of the statement or a record of deductions for at least three years (DLSE).

Questions employers ask. Does federal law require pay stubs? Not under the FLSA, though MSPA and H-2A employers must give statements (DOL FAQ; 29 CFR 500.80; 20 CFR 655.122). Can a pay stub replace Form W-2? No; the W-2 is a separate annual statement (26 CFR 31.6051-1). Do exempt salaried employees need hours on a California stub? The Labor Commissioner says total hours are not required for salaried exempt employees. Confirm specifics with a qualified professional.

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