How to Make a Pay Stub: Complete Guide for 2026

A pay stub documents what an employee earned and what was withheld during a pay period. Whether you employ one person or one hundred, you need to issue accurate pay stubs — and in most US states, you're legally required to.

This guide walks through every step: what a pay stub must contain, which states require them, and how to create one without errors.

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What Is a Pay Stub?

A pay stub (also called a paycheck stub, earnings statement, or payslip) is a document issued alongside every paycheck. It breaks down:

• Gross earnings for the period
• All deductions (taxes, benefits, retirement)
• Net pay — what the employee actually receives
• Year-to-date totals

The pay stub is the paper trail that proves wages were paid correctly. Employees use them for loan applications, rental agreements, and tax filing. You use them to demonstrate compliance if the Department of Labor comes knocking.

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Who Is Required to Provide Pay Stubs?

The US has no federal law mandating pay stubs. That burden falls to the states.

State	Requirement	Format
California	Mandatory, itemized	Paper or electronic with consent
New York	Mandatory	Written or electronic
Texas	No requirement	—
Florida	No requirement	—
Illinois	Mandatory, itemized	Paper or electronic
Washington	Mandatory	Electronic acceptable
Colorado	Mandatory, itemized	Electronic acceptable
Massachusetts	Mandatory	Paper or electronic
Pennsylvania	No requirement	—
Ohio	No requirement	—

Key point: Even if your state doesn't require pay stubs, issue them anyway. They protect you as much as they protect the employee.

California's Labor Code §226 is the strictest in the country. It requires nine specific data points, and violations cost $50 for the first offense, $100 for each subsequent one — per employee, per pay period.

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What a Pay Stub Must Include

A complete pay stub contains three sections: employee/employer identification, the earnings breakdown, and the deductions breakdown.

Required Fields

Field	Why It Matters
Employer name and address	Identifies the paying entity
Employee name	Matches the paycheck
Employee ID or SSN (last 4)	Required in CA, NY, and others
Pay period start and end dates	Establishes which work is being paid
Payment date	Date of disbursement
Gross wages	Total earned before any deductions
Hours worked	Required for hourly employees in most states
Hourly rate	Required where hours are listed
Regular vs. overtime pay	Separate lines required in CA, most other states
Federal income tax withheld	Based on W-4
State income tax withheld	If your state has income tax
Local/city income tax	If applicable
Social Security tax (6.2%)	Employee share of FICA
Medicare tax (1.45%)	Employee share; 0.9% additional above $200k
Employer-sponsored benefits deductions	Health, dental, vision premiums
Retirement contributions	401(k), IRA, etc.
Other deductions	Garnishments, union dues
Net pay	Gross minus all deductions
Year-to-date totals	For each earnings and deduction category

California requires all of these. Other states may require fewer, but issuing a complete stub protects you everywhere.

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Step-by-Step: How to Make a Pay Stub

Step 1: Gather Employee Information

Before you can generate a stub, you need:

• Employee's legal name (as on their Social Security card)
• Social Security Number (or ITIN)
• W-4 filing status and withholding elections
• Current pay rate (hourly or salary)
• Pay period frequency (weekly, biweekly, semimonthly, monthly)

Step 2: Calculate Gross Pay

For salaried employees: Annual salary ÷ number of pay periods = gross pay per period.

A $65,000/year employee paid biweekly earns $65,000 ÷ 26 = $2,500 gross per period.

For hourly employees: Regular hours × rate + overtime hours × (rate × 1.5) = gross pay.

40 regular hours at $18/hour + 5 overtime hours at $27/hour: (40 × $18) + (5 × $27) = $720 + $135 = $855 gross.

Don't forget to add:

• Bonuses and commissions
• Paid time off taken
• Any other compensation

Step 3: Calculate Federal Income Tax Withholding

Use the employee's W-4 to determine withholding. The IRS Publication 15-T provides the current withholding tables. Most payroll tools handle this automatically.

For 2026, the federal tax brackets for a single filer are:

• 10%: up to $11,925
• 12%: $11,926–$48,475
• 22%: $48,476–$103,350
• 24%: $103,351–$197,300
• 32%: $197,301–$250,525

Withholding is not the same as the marginal rate. The IRS tables account for the standard deduction and use annualized wages to determine per-period withholding.

Step 4: Calculate FICA Taxes

FICA consists of two taxes, both shared between employer and employee:

Tax	Employee Rate	Wage Base
Social Security	6.2%	Up to $176,100 (2026)
Medicare	1.45%	No limit
Additional Medicare	0.9%	Above $200,000 (employee only)

Example on $2,500 gross:

• Social Security: $2,500 × 6.2% = $155.00
• Medicare: $2,500 × 1.45% = $36.25

Step 5: Calculate State and Local Taxes

State income tax rates vary from 0% (Texas, Florida, etc.) to over 13% (California). Local taxes apply in cities like New York City, Philadelphia, and Detroit.

Use your state's withholding tables and the employee's state equivalent of a W-4.

Step 6: Apply Pre-Tax Deductions

Pre-tax deductions reduce gross pay before taxes are calculated. This lowers the employee's tax burden. Common pre-tax deductions:

• 401(k) contributions — employee elects a percentage
• Health insurance premiums — under a Section 125 cafeteria plan
• HSA/FSA contributions
• Dependent care FSA

Example: $2,500 gross minus $250 401(k) minus $150 health premium = $2,100 taxable wages.

Taxes are then calculated on $2,100, not $2,500.

Step 7: Calculate After-Tax Deductions

These are taken from net pay after taxes:

• Roth 401(k) contributions
• Wage garnishments
• Union dues
• Life insurance premiums (above IRS threshold)

Step 8: Calculate Net Pay

Net pay = Gross pay − pre-tax deductions − all taxes − post-tax deductions.

Full example:

Item	Amount
Gross pay	$2,500.00
401(k) (pre-tax)	−$250.00
Health insurance	−$150.00
Taxable wages	$2,100.00
Federal income tax	−$210.00
Social Security (6.2%)	−$130.20
Medicare (1.45%)	−$30.45
State income tax (est.)	−$84.00
Net pay	$1,645.35

Step 9: Update Year-to-Date Totals

Add this period's numbers to each running YTD total. Every category on the stub — gross, each deduction type, net pay — should have a corresponding YTD column.

YTD totals help employees reconcile their W-2 at year-end. They also flag errors: if Social Security YTD ever exceeds $176,100 × 6.2% = $10,918.20, you've overwitheld.

Step 10: Issue the Pay Stub

Deliver it with the paycheck. For direct deposit, send a digital stub via email, employee portal, or payroll software dashboard. For paper checks, print and attach.

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Common Errors to Avoid

Error	Consequence
Wrong pay period dates	Compliance failures in strict states
Missing hours worked for hourly employees	Labor Code violation in CA, others
Incorrect FICA calculation	IRS penalties
Not updating wage base limits annually	Overwithholding or underwithholding SS tax
Lumping deduction categories	California requires separate line items
Forgetting overtime at correct rate	Wage theft claim

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Why Manual Stubs Create Risk

Building a pay stub in Excel or Word is technically possible. The problems:

1. Tax tables change every year. You need to update brackets, SS wage bases, and state rates manually.
2. Human error compounds. A formula mistake in January means every stub is wrong all year.
3. No audit trail. A spreadsheet can be edited; a system-generated stub has a timestamp and record.
4. State compliance. California's nine required fields differ from New York's requirements. Manually tracking this across multiple states is a maintenance burden.

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Generate Pay Stubs with CleverSlip

CleverSlip's pay stub generator handles all of the above automatically:

• Select pay period and frequency
• Enter employee details and earnings
• Apply pre-tax deductions
• The system calculates federal, state, and FICA taxes using current tables
• Download a compliant, formatted PDF

No spreadsheets. No guessing whether Colorado or Washington state requires itemized deductions. The output is a properly formatted pay stub ready to issue.

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Summary

Making a pay stub correctly requires accurate gross pay calculation, correct tax withholding using current tables, proper pre-tax deduction sequencing, and complete required fields for your state. The math isn't difficult — the difficulty is keeping everything current and consistent across every pay period, every employee.

Use a purpose-built tool for payroll. Use this guide to understand what it's doing under the hood.