How to Create a Pay Stub for Your LLC or Small Business

If you run an LLC or small business, accurate record-keeping is essential not just for legal compliance, but also for managing payroll, proving income, applying for loans, or keeping your team organized. A pay stub serves as a detailed breakdown of wages paid to an employee (or yourself, if you’re a single-member LLC). It tracks gross income, deductions, and net pay, providing clarity and professionalism in every transaction.

Whether you're issuing a paycheck to yourself, contractors, or employees, this guide will walk you through how to create a pay stub for your LLC or small business quickly, correctly, and confidently.

What Is a Pay Stub?

A pay stub (also known as a payslip or earnings statement) is a document that outlines:

●      Total earnings during a specific period

●      Taxes and other deductions

●      Net pay (the amount received after deductions)

●      Year-to-date totals

For LLCs and small businesses, it’s used for:

●      Payroll processing

●      Income verification

●      Tax documentation

●      Loan applications

●      Proof of payment for contractors or self-employed individuals.

Step-by-Step Guide to Creating a Pay Stub

1. Collect Essential Business & Employee Information

Include:

●      Business name and address

●      Employer Identification Number (EIN) (optional for sole proprietors)

●      Employee name and address

●      Employee ID (if applicable)

Even if you’re the sole employee, adding your business’s information adds legitimacy and professionalism to the stub.

2. Specify the Pay Period

Determine:

●      Start and end date of the pay period (weekly, bi-weekly, or monthly)

●      Pay date (when the employee is paid)

Pay stubs should reflect regular pay periods for proper documentation and consistency.

3. Calculate Gross Earnings

This is the total amount earned before taxes or deductions. Gross pay can be calculated based on:

●      Hourly wage × hours worked

●      Fixed salary

●      Commission or bonus income

●      Owner’s draw or distribution (for LLC owners, if not on payroll)

If you're paying yourself as an owner, clarify whether the income is:

●      W-2 salary (for S-Corps)

●      Owner’s draw (for single-member LLCs)

4. List Taxes & Deductions

For employees:

●      Federal income tax

●      State income tax

●      Social Security & Medicare (FICA)

●      Retirement contributions (401k, IRA)

●      Health insurance premiums

For owners or contractors:

●      Estimated self-employment tax

●      Optional insurance, retirement, or other deductions

Be transparent with what is withheld to avoid confusion and ensure IRS compliance.

5. Determine Net Pay

Net pay = Gross earnings – Deductions

This is the amount the employee or owner actually receives. This figure is often the one used for loan applications, rent verification, or budgeting purposes.

6. Add Year-to-Date (YTD) Totals

Include:

●      YTD gross income

●      YTD deductions

●      YTD net pay

This helps track total payments throughout the fiscal year, a requirement for payroll reporting and taxes.

7. Format the Stub Professionally

Your pay stub should have a clean, professional layout with labeled sections for:

●      Company logo (optional but recommended)

●      All the above information

●      Notes or disclaimers (e.g., “For record-keeping purposes only”)

Avoid messy or confusing formats professionalism matters in payroll documentation.

Conclusion

Whether you're a solo entrepreneur or a small business owner with a team, creating pay stubs helps you stay compliant, look professional, and maintain solid financial records. Tools like PayStubGenerators.com simplify the process so you can focus on growing your business.