Pay Stub vs W-2: What Small Businesses and Employees Need to Know in 2025
Overview
The debate of pay stub vs W-2 is common for employees, contractors, and small business owners. While both are payroll documents, they serve very different purposes. A pay stub is a per-pay-period record of earnings, deductions, and taxes, while a W-2 is the official annual summary your employer issues for tax filing.
Understanding the differences between a pay stub vs W-2 ensures you know which document to use for banking, renting an apartment, applying for benefits, or filing your yearly taxes. Pay stubs give you detailed, ongoing proof of income, while a W-2 provides accurate year-end totals for the IRS and state agencies.
Need a clear example? See our regular pay stub guide or create a compliant pay stub in minutes using our pay stub generator.
Quick Comparison Table
| Feature | Pay Stub | W-2 |
|---|---|---|
| Purpose | Per-pay-period breakdown of hours, earnings, taxes, and deductions | Annual summary of taxable wages and withholdings for tax filing |
| Timing | Issued each pay period (weekly, biweekly, monthly) | Issued once per year for the prior tax year |
| Scope | Shows current period and year-to-date totals | Shows year-end totals only |
| Who Issues | Employer (via payroll or HR portal) | Employer (copies sent to employee and tax agencies) |
| Uses | Proof of income for rentals, loans, or verifying hours | Filing federal and state income tax returns |
What a Pay Stub Shows
- Employee and employer names
- Pay period start and end dates
- Hours worked (regular, overtime, PTO) and pay rates
- Gross pay, deductions, and taxable wages
- Withheld federal, state, and local taxes
- Net pay and year-to-date (YTD) totals
Because a pay stub is issued every cycle, it is best for verifying recent income, overtime, and contributions to retirement or health benefits during the year.
What a W-2 Shows
- Employer’s name, address, and EIN
- Employee’s name, address, and SSN
- Total annual wages, tips, and compensation
- Federal income tax withheld
- Social Security and Medicare wages and withholdings
- State and local tax details
- Special informational codes (retirement plans, dependent care, etc.)
A W-2 is primarily for tax purposes and must reflect accurate totals for the calendar year. Both employees and tax agencies use it to verify earnings and withholdings.
When to Use Each Document
Use a Pay Stub When:
- You need recent proof of income for rentals, loans, or benefits
- You want to check deductions, overtime, or hours worked
- You are reconciling payroll discrepancies mid-year
Use a W-2 When:
- You file federal and state income taxes each year
- You need an annual wage summary for financial aid or auditing
- You must confirm official totals with the IRS and SSA
Employees vs. Contractors
Employees receive both pay stubs each pay period and a W-2 at year-end. Independent contractors, however, typically submit invoices and receive a Form 1099-NEC if they are paid $600 or more by a client. Contractors may create pay stubs for personal recordkeeping using a generator, but these do not replace official tax documents.
How to Get Your Documents
Pay Stubs
- Log in to your employer’s payroll or self-service portal to download PDFs.
- If access is lost, request copies from HR or payroll staff.
- Create your own for recordkeeping using our pay stub generator — just ensure entries match actual payroll data.
W-2 Forms
- Employers must issue W-2s annually in January for the prior year.
- If you don’t receive one, request a reissue from payroll or HR.
- For prior years, request transcripts from the IRS or state tax agencies.
Common Mistakes to Avoid
- Using a single pay stub as proof of annual income — lenders often request multiple stubs or a W-2.
- Not reconciling YTD pay stub totals with W-2 figures before filing taxes.
- Mixing employee and contractor forms — a W-2 cannot replace a 1099, and vice versa.
Best Practices for Record-Keeping
- Download and securely store each pay stub throughout the year.
- Keep your annual W-2 with tax return documents.
- Reconcile pay stub YTD totals against your W-2 totals each year.
See what a clear stub should look like in our regular pay stub guide, or generate one instantly with the PStub pay stub generator.
FAQ
Is a pay stub the same as a W-2?
No. A pay stub is issued per pay cycle, while a W-2 is issued annually for tax filing.
Can I file taxes with only pay stubs?
No. Pay stubs are useful for estimates, but your W-2 provides official totals required by the IRS.
What if my W-2 does not match my pay stub totals?
Contact payroll to review pre-tax deductions and adjustments. If needed, your employer may issue a corrected W-2c.
Conclusion
The question of pay stub vs W-2 comes down to purpose: pay stubs show detailed earnings and deductions each period, while W-2s deliver official year-end totals for tax filing. Both are essential payroll documents that serve different but complementary roles.
For accurate records, generate professional stubs with our Pay Stub Generator and explore examples in our Regular Pay Stub guide. Staying organized ensures smooth loan applications, audits, and tax season.
