Paystubs

How to Make a Pay Stub: A Step-by-Step Guide (2026)

A pay stub is built from real payroll records, not estimates. Nine steps from employer details and pay dates through gross pay, taxes and deductions to net pay and year-to-date totals.

By Alexander Caldwell · August 17, 2026 · 3 min read

A pay stub should be built from real payroll information, not estimated or invented figures. Start with the employer and employee details, define the pay period and pay date, calculate gross earnings, apply the correct taxes and legitimate deductions, then confirm net pay and year-to-date totals before creating the final document.

The exact fields can vary by state and payroll situation, but the basic logic stays the same. A useful pay stub explains how an employee moved from gross earnings to the amount actually paid.

Step 1: Gather Employer and Employee Information

Start with accurate identifying information for the employer and employee. Use the business name and relevant business contact information along with the employee name and only the identifying details legitimately needed for payroll records.

A pay stub should not expose unnecessary sensitive data. Avoid displaying a complete Social Security number or full bank account number.

Step 2: Set the Pay Period and Pay Date

The pay period tells the employee which work dates the payment covers. The pay date tells the employee when the payment was issued.

Do not treat these dates as interchangeable. A pay period may end several days before payday because the employer needs time to review hours and process payroll.

Step 3: Calculate Regular and Overtime Earnings

For hourly employees, multiply eligible regular hours by the regular rate. If overtime applies, calculate overtime according to applicable federal and state rules and show it separately when appropriate.

For salaried employees, the amount for a payroll period is generally based on the salary and payroll frequency. Bonuses, commissions or other actual compensation should be identified separately when they apply.

Step 4: Determine Gross Pay

Gross pay is the employee's earnings before taxes and deductions are removed. Add all applicable earnings for the pay period to reach the gross amount.

Review the total against time records, salary information and any additional compensation before moving to deductions.

Step 5: Apply Payroll Taxes

Federal income tax withholding depends on the employee's Form W-4, taxable wages, payroll frequency and current IRS withholding rules. Social Security and Medicare taxes are calculated separately under applicable federal rules.

State and local payroll taxes vary by location. Use the rules for the employee's actual work and payroll situation rather than copying tax amounts from an unrelated example.

Step 6: Add Legitimate Deductions

Other deductions may include employee benefit contributions, retirement contributions or other authorized payroll deductions. Only include deductions that actually apply to the employee.

Each deduction should be understandable from the payroll record. Avoid unexplained amounts that make it difficult to reconcile gross pay with net pay.

Step 7: Calculate Net Pay

Net pay is the amount remaining after applicable taxes and deductions are subtracted from gross pay. In simple terms:

Gross Pay − Taxes − Deductions = Net Pay

Check the arithmetic before finalizing the statement. The net pay on the pay stub should reconcile with the actual payroll payment.

Step 8: Update Year-to-Date Totals

Year-to-date totals show cumulative payroll amounts from the beginning of the year through the current paycheck. Common YTD fields include gross earnings, taxes and certain deductions.

Accurate YTD figures are especially important because they create continuity between payroll periods and support year-end payroll reporting.

Step 9: Review the Pay Stub Before Creating It

Compare the final document with the underlying payroll records. Check the employee, pay dates, rate, hours, gross pay, taxes, deductions, net pay and YTD totals.

A professional layout cannot correct inaccurate payroll data. The information should be verified before the document is generated.

Legal and Responsible Use

Pay stubs should reflect genuine payroll transactions. They should not be used to invent employment, inflate income, alter payment history or misrepresent compensation.

A pay stub generator can help organize accurate payroll information into a clear document, but the user remains responsible for the truthfulness of the information and applicable payroll obligations.

Read My Full Online PayStub Guide