13 min
How to Create Electronic Pay Stubs (Without Replacing Your Payroll System)
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PeopleSpheres Creating electronic pay stubs shouldn’t force you to rip out the payroll process you already trust. Paper statements still clog printers, devour envelopes, and vanish the moment a lender asks for proof of income. We feel your pain. Instead, bolt a digital stub generator onto your existing workflow and be paper-free in 30 minutes.
In the next few minutes, you’ll learn which fields a compliant stub must show, how to choose a secure add-on, and a step-by-step workflow that turns raw payroll data into a password-protected PDF.
Related articles:
Pay Transparency: What You Need to Know About
A Payroll Guide for Household Employers
What an electronic pay stub must include
Think of a pay stub as a receipt for every dollar that moves on payday. Federal rules don’t mandate a specific format, yet the U.S.Department of Labor requires employers to record pay rates, hours, and deductions for each worker. To stay compliant, employers need to create a paystub that clearly lays out these details so the employee sees the same record.”
- Identity details: Company name and address, employee name, and the pay-period start and end dates.
- Earnings story: Gross wages (regular, overtime, bonuses) → every deduction → net pay that matches the direct-deposit amount.
- Year-to-date (YTD) totals: Cumulative earnings, taxes, and deductions so each new stub ties back to the running ledger.
- Itemized taxes and deductions: Federal, state, and local withholding, FICA, plus benefits or garnishments exactly as they appear in your payroll report.
A reputable online generator auto-calculates these fields and formats them for each state, so nothing slips through.
Miss even one detail and auditors, lenders, or employees may question the document. Nail them all, and your digital stub carries the same legal weight as its paper ancestor.
Paper vs. electronic pay stubs: benefits, risks, and myths
Paper feels tangible—right up until a printer jam or lost envelope steals half an hour. Electronic stubs arrive as encrypted PDFs or inside a self-service portal, so employees can view pay seconds after payroll closes without courier or filing cabinets. The cost case is similar: research from the American Payroll Association (cited by Business News Daily) shows businesses save about $1.20 per stub by posting statements online instead of printing and mailing, a savings that repeats every pay period and scales with headcount. It also improves the employee experience: remote staff want pay details on their phones, not in a desk drawer they rarely visit.
Security flips expectations, too. Verizon’s 2025 Data Breach Investigations Report notes that phishing appears in 19% of confirmed breaches, underscoring the value of strong access controls and password-protected files. And the “not official” myth? Banks and auditors accept an accurate e-stub the same way they accept paper, as long as every required field is present and correct. Bottom line: digital wins on speed, savings, security, and convenience provided you handle the data with care.
Buyer’s framework: how to choose a no-switch solution
You need an objective way to compare options.
Score each tool on eight criteria: accuracy, deductions handling, YTD carryover, delivery, security, template quality, support, and pricing.
Assign 1 to 10 points for each line, total the numbers, and the best choice will stand out.
1. Accuracy of calculations
Payroll math leaves no room for guesswork. A single misplaced decimal can trigger reissued deposits, amended returns, and IRS penalties that start at 2 percent of the unpaid deposit if you are even one day late.
What to look for
- Live tax tables: The software updates federal, state, and local rates automatically.
- All pay types covered: Hourly, salary, overtime, commissions, bonuses, and retro pay flow from gross to net without extra math.
- Anomaly alerts: Top-tier tools flag outliers, such as net pay higher than gross, before you click Generate.
Scoring tip
Give a 10 when the system handles every scenario and refreshes rates instantly. Subtract points if you must tweak formulas or enter taxes by hand. Run a dummy period and confirm that net pay matches the direct-deposit total to the cent.
2. Pre-tax and post-tax deductions handling
The right tool separates every deduction in the correct tax order. Mixing items into one “other” bucket can cause under-withholding or violate the Consumer Credit Protection Act cap of 50 percent–65 percent of disposable earnings for child-support garnishment, according to the U.S. Office of Child Support Enforcement.
What to look for
- Full library of deduction types: Pre-tax (benefits, retirement) and post-tax (garnishments, after-tax insurance) each get dedicated fields.
- Automatic sequencing: The system applies deductions in the legally required order.
- Editable priorities: Reorder items quickly if state law puts a levy ahead of a loan repayment.
Scoring tip
Award a 10 only when the software handles every common deduction and reflects the correct sequence on the stub. Anything that forces you to lump items into “miscellaneous” drops the score.
3. Year-to-date carryover
Mid-year moves to electronic stubs are common, but the math must stay continuous. Your tool needs a field for cumulative totals so the first e-stub picks up where the paper ended. After that, it should roll YTD numbers forward every cycle; otherwise the audit log breaks.
What to look for
- Opening-balance field: One screen to paste last period’s YTD totals.
- Auto-roll forward: Each new run recalculates YTD without extra clicks.
- Export accuracy: Reports match records you must keep for at least four years, per IRS guidelines.
Scoring tip
Give a 10 if the platform nails all three. Ignore a tool that omits YTD entirely.
4. Delivery and access
Creating the stub is only half the job; getting it to employees securely closes the loop.
What to look for
- Bulk, password-protected PDFs sent by email or secure link. The Society for Human Resource Management lists encryption “at rest and in transit” as a baseline control.
- Mobile-friendly self-service portal with multifactor authentication so staff can pull stubs from any device.
- Role-based permissions that block unauthorized views and leave an audit trail.
Scoring tip
Score a 10 when the platform handles bulk delivery, enforces encryption, and offers mobile access. Deduct points if it prints only to paper or forces one-by-one emails.
5. Security and compliance features
Payroll files hold Social Security numbers and bank details. Verizon’s 2025 DBIR shows phishing in 19 percent of confirmed breaches, so even one unprotected file is a risk.
What to look for
- Encryption at rest and in transit: Data stays AES-256 encrypted on the server and during download.
- Role-based access plus MFA: Limit who can view or resend stubs and require multi-factor login for admins and employees.
- Audit logs: Every view, edit, and download is time-stamped for review.
- Clear data-retention policy: The platform lets you enforce the IRS four-year minimum or longer if your state requires it.
Scoring tip
Award a 10 only when all four safeguards are built in. Anything less leaves you exposed.
6. Template format and professional appearance
A pay stub doubles as a lending document, so it must be easy to scan. Fannie Mae says pay stubs should be computer-generated, legible, and show YTD earnings to be accepted for mortgage underwriting.
What to look for
- Clean layout: Clear columns, readable fonts, and ample white space help lenders verify numbers.
- Branding options: Space for your logo and address signals authenticity.
- Custom fields: Add state-specific items or extra deductions without breaking alignment.
Scoring tip
Give a 10 if the tool offers multiple professional templates, logo upload, and W-2-level legibility. Dock points if you are stuck with a generic layout.
7. Support and ease of use
Payroll runs on a deadline, so help cannot wait. A Zendesk study found 92 percent of customers stay loyal to companies with live-chat support.
What to look for
- Real-time help: Live chat and phone support during payroll hours, plus 24/7 ticket backup.
- Plain-language UI: Menus and field names your bookkeeper can follow without a manual.
- Optional training: Short videos or tooltips are available but not required to finish a stub.
Scoring tip
Give a 10 if you can reach a human fast and complete a first stub without opening a help article. Deduct points for email-only support or jargon-heavy screens.
8. Pricing model
Match the fee structure to your headcount and pay frequency. The American Payroll Association puts paper savings at $1.20 per employee each run when companies post stubs online.
What to look for
- Per-stub pricing for only a few stubs each month.
- Flat monthly tiers once your roster grows past a dozen employees or you run weekly payroll.
- Hidden charges check: Watch for watermarks, mandatory add-ons, or pay-per-edit fees.
Scoring tip
Give a 10 when the total annual cost beats paper by at least 20 percent and scales predictably as you hire. Dock points if “free” plans add watermarks or the price jumps after an introductory period.
Tally your rubric. Any solution scoring 70 or higher is a contender; below 50 deserves a pass. With numbers in hand, your next step will be obvious.
No-switch solutions: three paths to electronic stubs
You don’t need a new payroll system to go paperless. Most teams pick one of three add-on approaches, selecting the path that fits headcount, budget, and appetite for manual work.
1. Stand-alone pay-stub generator
For micro businesses or contractors, a browser-based generator lets you key hours and deductions, then download a branded PDF in under a minute. Pay-as-you-go pricing, typically $8–$10 per stub, keeps costs predictable. The trade-off is manual entry, which grows tiring past a dozen employees. Best when: fewer than 15 employees or irregular pay runs.
2. Turn on the e-stub feature in your current payroll software
Most mainstream platforms (QuickBooks, ADP, Gusto) hide a “paperless pay statement” toggle. Flip it, and the system posts each stub to an employee portal; online payroll software for small business often includes this as a built-in feature. QuickBooks Workforce access is free once an employee accepts an invite. No double entry or PDFs to juggle, though some providers charge a small plan upgrade. Best when: you already use a well-known provider and run frequent payrolls.
3. DIY spreadsheet plus secure delivery
If the budget is zero, download a vetted Excel template, plug in current IRS tables, and export to a password-protected PDF. It works for one or two people, but every tax-rate change is on you, and one formula slip can snowball into corrected W-2s. Best when: short-term stopgap or emergency backup.
Revisit your choice each year. As headcount grows, the time cost of manual methods can overtake any licensing fee.
Fast migration in 30 minutes: from paper to electronic
Total time: about 30 minutes. Follow the five steps below; each line shows the target duration.
Step 1: Gather today’s payroll facts (5 minutes)
Open your latest payroll report and copy these fields into a clean worksheet:
- Company name, address, and EIN
- Employee full name and pay-period dates
- Current-period gross pay, plus year-to-date totals
Collecting everything first cuts context-switching and data-entry errors.
Step 2: Set up your stub tool (10 minutes)
- Stand-alone generator: create an account and paste the data you just gathered.
- Built-in payroll portal: go to Settings → Paperless pay statement, toggle it on, then invite employees by email.
- DIY template: add company info to the header and verify each tax formula against the latest IRS tables.
Aim to reach the preview screen before the 10-minute mark.
Step 3: Input, preview, and verify (10 minutes)
Enter gross pay, hours, overtime, and each deduction exactly as shown on your payroll report. Confirm net pay on the stub matches the amount scheduled for direct deposit. Accuracy to the cent is non-negotiable. Scan for truncated names, missing dates, or off-balance YTD totals, then click Finalize.
Step 4: Deliver securely (3 minutes)
Download the finished PDFs and lock each file with a strong password. The National Institute of Standards and Technology recommends at least eight characters with a mix of letters and numbers for payroll files. Send the password in a separate channel, or upload the PDFs to a role-restricted cloud folder so the system handles encryption and notifications automatically.
Step 5: Confirm receipt and archive (2 minutes)
Spot-check with a few employees to ensure they can open their stubs. Store your own copies in an access-controlled folder; IRS guidance requires payroll records be retained for at least four years.
Finish these steps once, and every future payday will take a fraction of the time. No paper, no envelopes, no last-minute file digging.
Accuracy & trust checklist: get it right every time
- Match net pay to the direct-deposit total. Any difference means the stub is wrong. Fix it before sending.
- Confirm YTD amounts. A surprise reset to zero triggers audit flags and employee questions.
- Scan deductions for realism. Federal tax can’t exceed gross pay; big jumps in health premiums often signal a typo.
- Verify pay-period dates. Overlaps or gaps confuse lenders and disrupt time-off balances.
- Lock the PDF. NIST recommends a complex eight-character password for sensitive payroll files.
- Mark any rerun “Amended.” Transparency builds trust and shows you own corrections.
Frequently asked questions
Are electronic pay stubs legal to send to employees?
Yes. Federal law (FLSA) requires wage records, not paper delivery. Most states allow e-delivery if employees can access stubs and request paper on demand. Check your state’s notice/consent rules.
Can I email pay stubs safely?
Yes. Encrypt the PDF and send the password via a separate channel (text/chat). A portal with MFA is safer. NIST recommends passwords of at least eight characters.
What information must appear on an electronic pay stub?
Employer/employee names, pay-period dates, gross pay, itemized taxes/deductions, net pay, and YTD totals. Missing fields can cause rejections.
Do independent contractors need pay stubs?
Not required, but a payment statement helps with taxes and lending. Many generators offer a 1099 layout (gross pay, no withholdings).
How do I handle multi-state employees?
Use software that applies each state’s tax tables and itemizes state withholdings. Verify YTD totals include all states worked.
How long should I keep electronic pay stubs?
Keep employment-tax records at least four years after the Q4 return; many retain seven. Cloud storage with version history simplifies compliance and retrieval.
Conclusion
You don’t need to replace payroll to go paperless. Just bolt on electronic stubs, keep your provider, and deliver secure, compliant PDFs. Focus on the essentials: show required fields, calculate gross-to-net accurately, carry YTD forward, and protect files in transit and at rest. Use the buyer’s framework, run the 30-minute workflow, and standardize habits (lock PDFs, restricted storage, 1-minute accuracy check). You’ll cut paper costs, reduce “please resend my stub” tickets, and keep a cleaner audit trail.If you’re ready to move today, start with a lightweight add-on and validate the process on your next payroll.
For secure archiving and compliant access to payroll files, you can also pair your stub solution with secure digital document storage using a platform like PeopleSpheres. A generator lets you create electronic pay stubs online in minutes, so you can keep your current provider and still give employees the digital experience they expect.
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