How to Make Pay Stubs for Employees

Salary statements, or pay stubs, make it easy for employees to keep track of their earnings and apply for loans, mortgages or credit cards. As a small-business owner, you can use a free pay stub program to create payslips for your staff. Most accounting software programs offer this option, too. Before getting started, make sure you know what's included on a pay stub.

Pay stubs display the wages earned for a set period, along with any personal deductions, taxes, employee contributions and other relevant details. These records inform workers how their wages are calculated. Usually, pay stubs are either attached to their paychecks or issued in digital format. If you pay your staff by direct deposit, you may provide electronic pay stubs.

According to the U.S. Department of Labor, the Fair Labor Standards Act doesn't require employers to issue payslips, but they still need to keep records of their employees' wages and hours worked. These documents confirm that your workers are classified as employees – not contractors – and that you're paying payroll taxes, notes Policy Matters Ohio. Depending on the regulations in your state, you can issue pay stubs in digital or paper format and send them to your employees on payday. Make sure you include the following information:

• Company name and address
• Employee name, address and Social Security number
• Gross and net earnings
• Hours worked and the hourly rate for the pay period
• Start and end date of the pay period
• Health insurance and other deductions
• Employee contributions
• Taxes withheld
• Back pay, overtime or bonuses (if applicable)
• Accrued sick leave (required in some states)

For example, California-based employers are required to provide payslips in paper format and record all deductions in ink, according to the Society for Human Resource Management. Some states, such as Alabama, Arkansas, Florida and Louisiana, don't require employers to provide pay stubs, reports Interfaith Worker Justice.

As an employer, it's in your best interests to provide wage slips to your staff members so that they understand the difference between gross pay and net pay. They may also need these documents to rent a house or apartment, apply for a loan or get a mortgage. Furthermore, employees may use their payslips to verify whether they qualify for safety net programs. Simply put, a wage slip serves as proof of income.

There are several ways to create a pay stub. For example, you can access Legal Forms or Stub Creator and download a free pay stub template. Fill it out and send it to your staff in digital or paper format. The California Labor Commissioner's Office and other state websites also offer free pay stub templates. If the template is available in PDF format, you can use Adobe Acrobat DC or another PDF editor to customize it according to your needs.

Another option is to use a free pay stub generator. Shopify, for example, offers this feature and doesn't require a user account. Fill out the form, and you're good to go. FormPros charges a small fee for each pay stub generated, but it has more features than Shopify and other free tools. The program can automatically calculate gross and net earnings, deductions, taxes and contributions based on the laws in your state.

Most accounting and payroll programs have built-in pay stub generators. If you subscribe to Sage, Patriot Software or Xero, you don't have to pay extra for this option. Plus, you get free payroll setup, inventory management tools, direct deposit payment processing and other handy features.