What Is a Paystub? Everything You Need to Know

Trust is the cornerstone of the employer-employee relationship. One of the most fundamental things you can do to develop trust is ensure your payroll processes are accurate and run on time.

Whether it’s miscalculating pay, missing payroll deadlines, or neglecting to keep diligent records, payroll mistakes can impact your credibility as a business owner. Beyond recordkeeping, your employees also rely on paystubs for some of life’s biggest milestones, like applying for loans, renting, or buying a home.

What is a paystub?

A paystub is a document issued by an employer that breaks down an employee’s gross earnings, deductions from those earnings, and net pay. They also display a range of other important details, such as taxes and benefits.

For employees, a paystub acts as a receipt of how much they’ve earned and where their wages are used. They can also use their paystubs to provide proof of employment when applying for various loans, like mortgages. For employers, paystubs provide detailed payroll records for tax and audit purposes, ensure legal compliance, and encourage trust between both parties.

A paystub can also be called a paycheck stub, salary statement, earnings statement, or pay slip.

What information is on a paystub?

A paystub shows the total amount an employee has earned, amounts deducted from those earnings, and the remaining take-home pay after deductions. Some paystubs also show the remaining sick leave and vacation leave hours the employee is entitled to during the current year. Separate columns show figures for the current pay period and year-to-date.

While paystubs may differ depending on the company, industry and the taxes and benefits deducted, they’ll usually contain key identifying information, for example:

• company name, address, and phone number
• employee’s name, address, social security number, and employee ID
• Canada Social Insurance Number (SIN)
• pay period start and end dates
• number of regular and overtime hours worked
• base wage rate
• check number
• pay date.

Next, a paycheck stub displays the amount of money the employee earned, including:

• gross income (take-home pay)
• net income (net pay)
• overtime pay
• paid time off (PTO)
• commissions and tips
• payroll advances
• bonuses and rewards.

It also shows how much money is taken out of an employee’s paycheck for the following:

• Canada Pension Plan (CCP), plus any other further reductions for healthcare, and charitable contributions
• Income tax, including federal and provincial taxes
• Employment Insurance (EI), which provides unemployment benefits if necessary.

Additionally, paystub templates typically display year-to-date (YTD) data, which is a summary of the employee’s earnings and deductions from the beginning of the year to the current date.

What do the abbreviations mean on a paystub?

Not sure how to read a paystub? Below are abbreviations for some of the most common Earnings and Deductions codes employers may list on a paystub.

Do employers have to provide a paystub?

In Canada, the government requires employers to give employees paystubs within the first 30 days of employment. Written employment stubs must be kept for 36 months after the employment ends. Employers must also provide employees with copies of their statements if requested.

However, paystub details can vary from province to province, so it’s important to look up the rules for your territory. Especially if your organization does business in more than one province.

How to create a paystub

Employers can create professional-quality paystub templates in several different ways. If you’re just starting and resources are slim, handling payroll by yourself can be the most cost-effective. As your organization grows and this task becomes more time-consuming to handle, enlisting the help of payroll software is usually the way to go.

Here are some of the most common ways to create paystubs.

Use dedicated payroll software

The simplest way to generate paycheck stubs for your workforce is by using payroll software.
Most payroll providers generate paystubs for each employee, automating the process for business owners. Let’s see how this works using BambooHR^® Payroll as an example.

With BambooHR^®, employers manage essential payroll data in a centralized location, inputting key information like:

• direct deposits
• hourly, salary and overtime status
• pay schedule
• wage rate
• withholdings.

When you’re ready to run payroll, all the information you’ve entered flows into the system automatically. All you have to do is edit your employees’ hours, make final pay additions, and review deductions.

On the employee side, BambooHR generates paycheck stubs under their profiles in an easy-to-understand format. They’ll receive a notification on payday with a link to their paystub, which they can view, download as a PDF, and save for their records.

Use a paystub template to create a spreadsheet

A free way to create paystubs is by using a spreadsheet in Microsoft Excel or Google Sheets. You can start by creating a paystub template from scratch, or you can use our template guidance below. However, if you plan to start using payroll software, you may want to skip this step, as many programs have built-in payroll spreadsheet templates.

Here’s how to create a basic spreadsheet with a paystub template:

1. Create a table with the information you want to include on your paycheck stub.
2. Fill in the table and double-check it for complete accuracy.
3. Add formulas into the cells to auto-calculate the totals.
4. Highlight or colour-code certain rows for easier viewing.
5. Print the data for each employee.

Keep in mind, the more employees and benefits your company has, the more complex your table and its calculations become. Aside from using software, a premade paystub template will make this task quicker and easier each week.

What does a paystub template look like?

Every business will have a different layout for paystub templates, but they should include the details we’ve listed above. As a quick run-down:

• company name and details
• employee name and details, including SIN
• pay period and number of hours worked
• base wage
• pay check number and date
• gross and net income
• overtime and PTO
• commissions and bonuses
• federal and voluntary reductions (taxes, pensions, insurance, etc.).

This helps employees understand their net pay, pre-tax deductions, and more.

For example, small-scale companies may use a simpler pay slip design with tables or blocks. Meanwhile, medium to large organizations may design their paycheck stubs with a grid-based layout and colour-coded sections, such as red for deductions and green for gross pay.

In short, a paycheck stub is what you make it. Ensure you include all the necessary information in a professional, accessible way to avoid confusion and guarantee transparency.

Paystub requirements in Canada

As an employer, you are required to include essential information on every employee paystub, as mentioned above. For example, employee details, SIN, base wage rate and hours of work, as per the Canada Labour Standards Regulations.

Besides being a legal requirement, paycheck stubs serve as a handy reference. Employers use these statements to maintain accurate payroll records, fill out CCP and EI forms at tax time, and resolve pay discrepancies. Employees use their paystubs to track their income and verify withholdings during each pay cycle.

Plus, many landlords and lenders require paystubs to prove a person’s income, so they may be necessary to help your employees rent an apartment, get approved for a loan, or refinance their mortgage.

By providing paystubs that break down payroll line by line, you can reduce the likelihood of potential disputes, make life easier for your employees, and create better transparency across your organization.

Paystubs vs. paychecks

A paycheck is the actual money payment an employer makes to an employee, while a paystub is the document that breaks down and explains the payment. It shows things like gross and net pay, along with any deductions from an employee’s wage.

Here are the key differences:

Paychecks

• the money an employee receives
• either a physical check or, more often today, a direct bank deposit
• its purpose is to provide funds to an employee.

Paystubs

• the itemized bill or receipt for the money received
• often attached to the paycheck or provided with it
• its purpose is to provide a detailed breakdown of an employee’s earnings and deductions.

Paystub FAQs

Whether you’re a payroll professional or are just getting started, there can be lots to keep track of. To help you keep on top of employer requirements and ensure your payroll processes run smoothly, we’ve answered some commonly asked questions on the topic below.

Does a paystub show the employee’s annual salary?

No, a paystub doesn’t include details of an employee’s annual salary. It does however, usually contain key information around the base wage rate and number of hours worked. To confirm their annual salary, employees must check the rates of pay for the public service in their collective agreement.

Do provinces have different rules around paystubs?

Yes, different provinces have different rules around paystubs in Canada. For example, in Alberta, employers must give employees pay statements each pay period. Therefore, although federal rules apply nationwide, it’s also important to look up the paystub rules for your specific territory.

Are fake paystubs illegal?

A fake paycheck stub is a fraudulent document that misrepresents income information. While creating counterfeit paystubs isn’t illegal‌, forging them for personal gain (for example, applying for a loan) is illegal in Canada.

For example, submitting fraudulent documents on a loan application—like a fake paycheck stub—is a federal crime that can have serious consequences. Likewise, a landlord can take legal action against someone who has submitted forged paystubs as proof of income to rent an apartment.

The government also has a set of specific laws against document fraud, whether you're a business or an individual.

Can self-employed workers get paystubs?

Self-employed individuals can pay themselves in many ways, depending on their business structure (e.g., sole proprietorship, LLC, S-corp). Even though self-employed people aren’t legally required to create paystubs, many find that it’s easiest to pay themselves a regular salary, just like any employee, paycheck stubs and all.

As a self-employed person, keeping diligent payroll records helps ensure you’re paying taxes accurately and makes it easier to submit proof of income for a personal loan or for any other reason. It’s good practice to use a standard paystub template, so you can ensure you’re keeping accurate and legally compliant records of your earnings.

Perfecting your paystub process

As an employer, you’re legally required to provide your employees with paystubs to break down their paycheck earnings. There are also several things you must include in your paystub template. While this may seem daunting for new or small business owners, it will quickly become part of your routine.

BambooHR software can help you manage and record important employee data and payroll records, so you can ensure you stay compliant. Pay your people confidently with our all-in-one platform that helps keep you on track.