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HomeFinance and AccountingPayrollWhy Every Company Needs to Use Pay Stubs

Why Every Company Needs to Use Pay Stubs

There are undoubtedly numerous responsibilities that company leaders must tend to when running the affairs of their businesses. Corporations with several employees on payroll are particularly cumbersome to manage. Apart from ensuring that the enterprise remains profitable, catering to the employees’ needs is perhaps the next significant priority. When it comes to the payment of workers, pay stubs to play a principal role in ensuring that the entire process is fair and transparent. 

What Are Pay Stubs?

A pay stub, also known as a check stub, is a document that highlights each employee’s paycheck details for every payment period. Apart from wages, these documents detail other vital information about an employee’s pay like deductions and taxes. In most cases, pay stubs are attached to paychecks or included with them as a separate document. What’s more, while some companies create check stubs in-house, other businesses may prefer to employ the services of a check stub maker. Still, regardless of how a business generates its pay stubs, they all serve the same purpose. This article highlights the importance of check stubs and why every company needs to use them. 

The Contents of a Pay Stub

Check stubs vary depending on the laws governing the state where a company is located and industry policies. Still, here are some details that most pay stubs have. 

General Information

The general information included on check stubs should have an employee’s official work details. Apart from identification information, a pay stub should also include the dates and hours worked by each employee. Moreover, a check stub should indicate the rates used to pay the employees. 

Gross and Net Wages

Similarly, pay stubs should also showcase the gross and net earnings of an employee. The gross wages include the total payments that an employee is entitled to before deductions. Therefore, gross wages include overtime and any other bonuses. On the other hand, the net pay is the amount left over after all deductions. 

Deductions and Contributions

Another vital piece of information included in a pay stub is the amount of deductions taken out of the employee’s gross pay. They include taxes, allowances such as meals, and contributions like a retirement plan. 

The Significance of Pay Stubs

Although pay stubs may seem like mere records of an employee’s payments, they are vital to employers and workers. Check stubs enable both parties to record an employee’s wages, taxes, and other deductions from their pay. Contrary to what some may think, this information is vital for businesses. Here are some reasons why check stubs are paramount in every company. 


Employers need a record of how they pay workers for payroll compliance, accountability, and transparency. Moreover, this information would be required when the company needs auditing. Although not all states require employers to provide pay stubs, there’s no denying how important they are. 


Employees ought to know the withholdings and deductions their employers take from their payments. Not only does this improve trust between employees and their bosses, but it also boosts morale. Moreover, having a well laid out rundown of all payments helps reduce confusion and confrontations.

Employee Benefits

Another advantage of having pay stubs is it allows employees to seek out employee benefits. Given that check stubs are proof of employment and display your financial strength, employees can use them to acquire loans, mortgages, credit cards, and other assets. 

Despite the numerous advantages that pay stubs to provide, not all states require employers to issue their workers with these documents. In states like Florida and Georgia, it’s not mandatory for business owners to provide check stubs. For this reason, it would be shrewd to check with state laws if your business must offer pay stubs to employees. 

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