How to Read a Pay Stub and What It Must Include

Gaps are common, even where the law is detailed. According to the most recent report on the application of the Act respecting labour standards from Quebec’s Ministère du Travail, 19.4% of non-unionized employees in Quebec say at least one mandatory item is missing from their pay stub: the wage rate, the hours they actually worked, their overtime, or their tips. That’s one employee in five, under some of the most prescriptive pay stub rules in the country. There’s no reason to think employers elsewhere are doing better.

What the law requires on a pay stub in Canada

A pay stub, also called a payslip or a wage statement, is the record that comes with every wage payment and breaks down how it was calculated.

That obligation holds everywhere in Canada. With every pay, your employee needs a statement detailed enough to check how their wages and deductions were worked out. What changes from one province to the next is how much detail the law actually spells out.

The rules follow the province or territory where the work happens, not where your head office sits. Run a team in Ontario and another in Alberta, and you’re on the hook for two sets of requirements. Banks, airlines, telecom companies, and railways are the exception: they answer to the federal Canada Labour Code.

The good news is that the rules mostly overlap. A stub with all eleven of these will hold up just about anywhere:

1. Employer’s name
2. Employee’s name
3. Pay period and date of payment
4. Wage rate
5. Hours worked, broken out by rate
6. Overtime hours and applicable rate
7. Vacation pay and statutory holiday pay
8. Bonuses, commissions, and allowances
9. Gross wages
10. Each deduction, with its amount and its purpose
11. Net pay the employee receives

The differences are in the extras: banked overtime in Alberta, your business address in British Columbia and PEI, tips in Quebec.

Here’s what each province and territory asks for.

Pay stub requirements across Canada

Source: National Payroll Institute, Pay Statement Guidelines. These requirements get updated. Confirm with your province’s employment standards office before changing your stubs.

Your payroll software or your collective agreement may add lines of their own. Everything above is the floor, not the ceiling.

A complete pay stub is your best protection. It’s the document employees turn to when they want to confirm their pay, and what settles most questions before they ever reach you.

How to read a pay stub, line by line

Most stubs work the same way: earnings first, deductions next, and what’s left is what hits the bank account. Here’s how to read each part.

One thing to flag before you start: stubs usually carry two columns, one for the current pay period and one for the year-to-date total. So when an employee brings you a number that looks far too big, it’s almost always the year-to-date figure rather than what they earned this pay period.

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Earnings

This is the money earned during the period, before any deductions. It usually covers:

• Regular pay: the hours worked at the regular rate, multiplied by that rate.
• Overtime: hours worked past the daily or weekly threshold set by your jurisdiction, which runs from 40 to 48 hours a week depending on where you are. Overtime is paid at a premium, usually time and a half, or banked as time off in lieu where the law allows it.
• Bonuses, premiums, and commissions: an evening or weekend premium, statutory holiday pay, or a sales commission, for example.
• Tips: the tips the employee declared, plus any you allocated to them

Add all of that up and you get gross wages.

Plenty of pay stubs also show the vacation pay balance: the amounts set aside with every pay that the employee receives when they take their vacation. It isn’t paid out on this cheque. It’s a balance that grows in the background.

Taxable benefits

Some pay statements include a taxable benefits line. This is a benefit you pay for on the employee’s behalf, part of their group insurance for instance. They never touch that money, but they pay tax on it as if it were wages. That’s why an employee can be taxed on an amount slightly higher than the wages they were paid.

Statutory deductions

These are the amounts you have to withhold from the pay and remit to the CRA, or to Revenu Québec for employees working in Quebec. They come off every single pay:

• CPP or QPP: the Canada Pension Plan, or the Quebec Pension Plan for employees working in Quebec. Either way, the contribution funds the employee’s retirement.
• Employment Insurance (EI): the federal premium that opens the door to benefits if they lose their job. The rate is lower in Quebec, since parental benefits are covered provincially.
• QPIP (Quebec Parental Insurance Plan): a Quebec-only deduction that funds parental leave.
• Federal and provincial income tax: an estimated amount withheld on every pay. The real calculation happens at tax time. If too much was withheld, the employee gets a refund. If not enough, there’s a balance left to pay.

Outside Quebec, the CRA collects both taxes together, so they land on a single “Income tax” line. In Quebec, Revenu Québec collects the provincial share, which gets its own line. In the Northwest Territories and Nunavut, a territorial payroll tax also comes off every pay.

Optional deductions

These vary from one employer to the next. They depend on the benefits you offer and the agreements in place at your company:

• Group insurance premiums (health, dental, life, disability).
• Contributions to an employer pension plan or a group RRSP.
• Union dues, where applicable.
• Other agreed-upon deductions, like a social club contribution.

Net pay

This is the bottom line: gross pay, minus every deduction, plus any reimbursements (an expense claim, for example). It’s the amount that lands in the employee’s account.

A concrete example

Take Sarah, a pharmacy clerk who earns $22 an hour. For a two-week pay period, her pay stub might look like this:

Earnings

• 70 regular hours at $22 = $1,540
• 3 overtime hours at $33 = $99
• Gross pay: $1,639

Deductions

• CPP: $90
• Employment Insurance (EI): $25
• Income tax: $295
• Group insurance: $20
• Total deductions: $430

Net pay: $1,209 (the amount deposited in her account)

Every line on the statement should let Sarah redo that calculation on her own: earnings, minus deductions, equals net. If she can’t, that’s a sign something is missing.

To check your own template, Quebec’s CNESST publishes a free sample pay statement that works as a checklist in any province.

⚠️ Note: The figures in this example are fictitious and rounded, and shown for illustration only. They don’t reflect real deduction rates and shouldn’t be used to calculate an actual pay.

Common mistakes to watch for

A stub with pieces missing generates questions, and sometimes formal complaints. Here’s where employers slip most often:

• Leaving out overtime. This one tops the list, especially when hours are tracked by hand. An employee who can’t find their overtime on the stub is right to ask about it. Time and attendance software that logs hours as they’re worked stops the problem before it starts.
• Lumping deductions together. Every province wants the amount and the purpose of each one. A single “Deductions: $320” line with nothing behind it won’t pass anywhere.
• Mixing up the hourly rate and gross pay. These are two different things: the hourly rate is what the employee earns per hour, and gross pay is the total earned over the whole period. The pay stub has to show both.
• Using one province’s template everywhere. If your teams work in more than one province, a stub that passes in New Brunswick can fall short in Alberta or Quebec. Build to the strictest standard that applies to you.
• Overlooking tips. In Quebec, declared and allocated tips have to appear on the stub. Everywhere else, showing them is still the cleanest way to head off a dispute.

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Make your pay stubs easy to understand

A compliant pay stub is one thing. A stub your employees actually understand is another. And that second one is what buys back your time: an employee who can read their own pay comes to you less often, and trusts the numbers more.

At Agendrix, we made a short video that walks our employees through our own stub, line by line. New hires watch it, everyone else can pull it up whenever a question comes to mind, and nobody has to book time with payroll to get an answer.

You can do the same at any size. A one-page explainer or a two-minute clip usually covers what people need. Once it’s ready, send it to the whole team at once through a team communication tool or an internal feed, so it doesn’t reach only half of them.

👉 Tell your employees to look at their stub every payday. It works in their favour as much as yours: an error caught this week is a lot easier to fix than one caught in March.

A clear pay stub builds trust

A pay stub is more than a legal obligation. It’s the moment your employee sees what their work is worth, and the moment your company shows it runs payroll with care. Your employees should never have to guess how their pay was calculated.

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