Know the Rules: Here’s How Your Business Should Handle Employment Pay Stubs

Thanks to a shocking report from the Treasury Inspector General for Tax Administration, the IRS is clamping down on business owners who do not abide by payroll law. The report revealed that non-compliance with payroll laws has more than tripled in a 17-year period, which the IRS is now addressing with stricter control measures. 

Running afoul of the IRS is no fun, and the thought of it is enough to keep many a business owner awake at night. 

The good news is that complying to Federal and state laws around payroll and employment pay stubs is relatively simple. And we are going to walk you through everything you need to know to ensure that you can keep both the law and your employees happy come payday.  

You Are Not Required by Federal Law to Keep Payroll Records

Federal law does not require you to submit pay stubs to your employees. But as directed by the Fair Labor Standard legislation you as an employer are required to maintain accurate, detailed records of your payroll.

State Law May Require You to Submit Pay Stubs to Your Employees

Although the Fed does not require you to generate pay stubs, state law might. In some states, it is law for employers to present their employees with pay stubs.

States Requiring Pay Stubs

Here is the list of states which require employers to generate pay stubs:

  • Alaska
  • Missouri
  • Pennsylvania
  • Arizona
  • Montana
  • Rhode Island
  • Idaho
  • Nebraska
  • South Carolina
  • Illinois
  • Nevada
  • Utah
  • Indiana
  • New Hampshire
  • Virginia
  • Kansas
  • New Jersey
  • West Virginia
  • Kentucky
  • New York
  • Wisconsin
  • Maryland
  • North Dakota
  • Wyoming 
  • Michigan
  • Oklahoma

States Not Requiring Pay Stubs

Other states do not have any laws in place requiring you to submit pay stubs to your employees. These are:

  • Alabama
  • Arkansas
  • Florida
  • Georgia
  • Louisiana
  • Mississippi
  • Ohio
  • South Dakota
  • Tennessee

In these states, you can still choose to generate pay stubs as a service to your employees. 

What You Need to Put on a Pay Stub

Here is a list of the information found on pay stubs:

  • The dates of the pay period
  • Gross earnings
  • Federal taxes withheld
  • State taxes withheld
  • Local taxes withheld
  • Deductions
  • Contributions
  • Total deductions
  • Net pay
  • Pay rate 
  • Year-to-date payroll earnings
  • Total number of hours worked for hourly workers 

Besides this info, you will also need to state the employee’s individual personal details. 

If this list of things to include in a pay stub – as well as the thought of figuring out how to draw on up – is filling you with dread, then definitely check out PayStubCreator. This tool allows you to easily fill out pay stubs and print them out with no software necessary. 

In What Form to Send Employment Pay Stubs

Speaking of printing out pay stubs, different states have different rules when it comes to the form in which you can send employee’s pay stubs. 

In the following states, it is required by law that you provide your employees with printed or written pay stubs:

  • California
  • Maine
  • Texas
  • Colorado
  • Massachusetts
  • Vermont
  • Connecticut
  • New Mexico
  • Washington
  • Iowa
  • North Carolina

Besides these states, most other states are fine with you sending your employees their pay stubs electronically. 

But, there is a further subsection of states that require you to offer your employees the option to opt-out of electronic pay stubs. These are:

  • Delaware
  • Minnesota
  • Oregon

And lastly, if you live in Hawaii you will need to gain your employee’s consent before sending them any electronic pay stubs in place of printed copies. 

Final Word

If you are new to the payroll process, the correct creation of employment pay stubs can seem like a highly complicated undertaking. But now that you know about the legislation around pay stubs, what to include on them, and an easy tool to generate them – you can start sending out your new employees’ pay stubs like a boss. And a fully compliant boss at that!

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