Pay Stub Example: What to Include and Reporting Requirements
Are Pay Stubs Required?
It depends upon who you ask. Here’s what authoritative sources have to say:
- United States Department of Labor - There are no requirements in the Fair Labor Standards Act (FLSA). This regulation deals with overtime, minimum wage, record-keeping and more but it does not require a statement of wages earned to accompany a paycheck.
- State Legislatures - Most states have rules and regulations on what to include in a pay stub as well as how and when it must be provided. However, the requirements vary by location. Several states, including Florida, Arkansas and Tennessee, are silent on the issue of pay stubs. Others not only detail what to include but also make provisions for electronic distribution. The United States Department of Labor website provides links to the Department of Labor in each state.
- Legal Counsel - It is prudent to provide this documentation because it allows for early identification of issues and pre-empts litigation on pay discrepancies.
An employee expects a statement of wages to accompany his or her paycheck. Because of the employee’s personal stake in correct reporting, his or her review serves as a control in ensuring that proper payment has been made. The payroll deduction calculations are performed by the department responsible for submitting payroll taxes, paying medical premiums and other important actions on behalf of the employer. As a result, a reputable company will conclude it is important to provide complete and accurate pay stubs to employees each pay period.
Pay Stub Example
In spite of the varied state reporting requirements, a sample standard pay stub is achievable. A pay stub example can be downloaded from the Bright Hub Media Gallery. It encompasses the most stringent state requirements. Add or remove line items using the following descriptions of the key elements.
- Employer Information - This section should include the legal company name, the operating name (if different from the legal name), address and phone number.
- Employee Information - Include the employee name, last four digits of social security number and other information needed for internal identification and reporting purposes, such as identification number, department name and personal address.
- Earnings - This section encompasses all taxable earnings for the employee. Possible line items include regular, overtime, sick, vacation, bonus, incentive and supplemental compensation. Taxable fringe benefits, such as excessive educational benefits paid by the employer, should also be reported. Note that taxable fringe benefits must be deducted from total earnings as part of the reconciliation to net pay. If employees are paid based upon piece-rate units, then detail this calculation rather than rate of hourly pay.
- Deductions - Itemize the purpose and amount of all before-tax and after-tax deductions. The list of possibilities is long and includes: contributions to retirement plans and flexible spending accounts; payments for medical insurance, life insurance, union dues and parking; purchases of stock; donations to charitable organizations and garnishments.
- Taxes - List withholdings for federal, state, local taxes, social security and Medicare. Identify elections made for taxable marital status and withholding deductions to facilitate the computation of these deductions.
- Net Pay - The amount of the check will equal this amount.
A number of automated solutions, including some free payroll software options, are available to manage the payroll function. Make sure the pay stubs generated meet the requirements of your state.
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