Making a check stub, also called a pay stub, is an exercise in getting the order right. Do the steps in this sequence and the totals reconcile every time.
In brief: fill in the employer, employee and pay period, total the earnings into gross pay, take out pre-tax deductions, then calculate federal income tax, Social Security, Medicare and state and local tax. Subtract after-tax deductions to reach net pay, which must match the check, and carry the year-to-date totals forward.
What you need before you start
- The employer's legal name and address.
- The employee's name, address and an employee ID or the last four digits of the SSN.
- The pay period, pay date and pay frequency.
- The hourly rate and hours worked, or the annual salary, plus any overtime, bonus, commission or tips.
- The employee's Form W-4 and any state withholding certificate.
- Deductions: retirement deferrals, health premiums, HSA contributions and any garnishment order.
- The previous stub, for the year-to-date totals.
Then choose a method. A pay stub generator applies the tax tables for you, payroll software does the same for a whole payroll, and a template or spreadsheet leaves the withholding to you. The steps are the same whichever you use.
Step 1: Identify the employer and the employee
Write the employer's legal name and address. Add the employee's name, an employee ID if you use one, and at most the last four digits of the Social Security number. Never put a full SSN on a stub.
Step 2: Set the pay period and pay date
The pay period is the stretch of work the check covers, say September 1 to September 14. The pay date is when the money arrives, often a few days after the period closes. State the pay frequency (weekly, biweekly, semimonthly or monthly) because the tax tables depend on it.
Step 3: Enter the earnings
For hourly employees, list regular hours and the rate, then overtime hours and the overtime rate. Under the Fair Labor Standards Act, employees who are not exempt get at least one and a half times their regular rate for hours over 40 in a workweek.
For salaried employees, enter the salary for the period: the annual salary divided by the number of pay periods in the year. Add bonuses, commissions and tips on separate lines.
Step 4: Total the gross pay
Add every earnings line. This is gross pay, the base for the taxes.
Two items are easy to leave out. Tips an employee receives from customers are generally wages subject to withholding (IRS Publication 15). Taxable fringe benefits, such as personal use of a company car, are also pay unless the law excludes them (IRS Publication 15-B).
Step 5: Work out the pre-tax deductions
Retirement deferrals and Section 125 benefits come out before tax. Retirement deferrals reduce income tax wages only; health premiums and HSA contributions reduce Social Security and Medicare wages as well. Note the two taxable wage figures before moving on. The worked example below shows both.
Step 6: Calculate federal income tax
Use the percentage method in IRS Publication 15-T with the employee's Form W-4 (filing status, Step 2 checkbox, Step 3 credits, Step 4 adjustments) and the pay frequency. The FIT guide walks through the method.
Step 7: Calculate Social Security and Medicare
Social Security is 6.20% of FICA wages until the employee's year-to-date wages reach the Social Security wage base, $184,500 for 2026. Medicare is 1.45% of all FICA wages, with no cap. The OASDI guide shows how the Social Security line is worked out.
On top of that, withhold the Additional Medicare Tax of 0.9% on wages above $200,000 in the calendar year. Start in the pay period when the employee's wages pass that amount and continue to the end of the year (IRS Publication 15).
Step 8: Add state and local tax
Apply the state's withholding formula, if the state has an income tax. Nine states have no income tax on wages.
Then check for local tax, the line most often missed. Many Ohio cities tax wages, and in Pennsylvania municipalities and school districts levy an earned income tax. Which one applies usually depends on where the employee works or lives.
The local wage base can differ from both federal figures. Ohio cities, for example, tax wages before 401(k) deferrals but after Section 125 deductions (Ohio Revised Code 718.01).
Step 9: List after-tax deductions
Roth contributions, union dues, garnishments and other after-tax items go here.
Take a garnishment exactly as the order states. Federal law limits how much of an employee's disposable earnings most garnishments can take, with different limits for child support and tax levies (Department of Labor).
Step 10: Subtract to get net pay
Gross pay minus all taxes minus all deductions equals net pay. This must equal the check or deposit amount. If it does not, one of the earlier steps is wrong. Gross pay vs net pay explains each line in between.
Step 11: Fill in the year-to-date column
Add this period's amounts to the previous stub's YTD figures for every line. For the first stub of the year, YTD equals current. Read what YTD means.
Step 12: Check and issue
Confirm the pay period, pay date and tax year, then give the stub to the employee with the payment and keep a copy in the payroll record. Check it against the eleven things a complete stub shows.
Keep the payroll records for at least three years, and the time cards, rate tables and other records the pay was calculated from for two years (Department of Labor Fact Sheet 21). Check your state's rules as well.
Worked example: a salaried employee in Ohio
This is the stub in the image above, followed through the steps. The 401(k) deferral lowers income tax wages but not Social Security and Medicare wages, while the Section 125 health premium lowers both. That is why the two wage lines differ.
| Step | Line | Amount |
|---|---|---|
| 3 | Salary | $3,000.00 |
| 4 | Gross pay | $3,000.00 |
| 5 | 401(k) deferral, 6% of gross | -$180.00 |
| 5 | Health premium (Section 125) | -$95.00 |
| 5 | Income tax wages (gross minus both) | $2,725.00 |
| 5 | Social Security and Medicare wages (gross minus health only) | $2,905.00 |
| 6 | Federal income tax | -$145.33 |
| 7 | Social Security | -$180.11 |
| 7 | Medicare | -$42.12 |
| 8 | Ohio income tax | -$64.77 |
| 8 | Local tax (Cleveland) | -$72.63 |
| 9 | After-tax deductions (none in this example) | $0.00 |
| 10 | Net pay (gross minus taxes and deductions) | $2,220.04 |
The chart shows the same stub another way: how much of the gross pay reaches the employee, and which lines take the rest.
Common mistakes to avoid
- Wrong pay frequency. The withholding tables are per pay period, so a biweekly employee run as semimonthly gets the wrong federal and state tax.
- One taxable wage figure for everything. Social Security and Medicare come from FICA wages, income tax from income tax wages. Mixing them up is the most common error.
- A missing local tax line. Check the city, county and school district for the work and home address.
- YTD that restarts or skips. Carry every line forward from the last stub, and start again only on the first pay date of a new year.
- A full Social Security number. Show the last four digits at most.
- Net pay that does not match the deposit. Find the difference before the stub goes out.
Do employers have to give pay stubs?
Not under federal law. The Fair Labor Standards Act makes employers keep payroll records but says nothing about handing employees a stub (Department of Labor FLSA questions and answers). Many states do require one.
Washington, for example, requires a stub each payday showing the pay basis, the rate, gross wages and every deduction. It can be electronic or on paper, but an employee who cannot receive it electronically must get a written one (Washington Labor & Industries). Check your state labor department for its list.
Employees often need these stubs later for a loan or a lease. See bank statement vs pay stub for what lenders and landlords ask for.
The fast way
The pay stub generator does steps 4 through 11 for you: enter the details from steps 1 to 3, choose the state, and it calculates the taxes, fills in YTD from the pay date and frequency, and produces a PDF.
For a printable layout to fill in by hand, use the pay stub templates or the payroll check with stub.
