How to Create a Payslip

Learning how to create a payslip is an essential part of the payroll process for any small-business owner, whether it’s made in Excel or using an online generator.

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Creating a payslip can feel like a daunting task—especially to small-business owners who wear many hats. But payslips are an important part of the payroll process—helping to streamline employee payment, ensure compliance with state laws, and create greater transparency between employees and their employers. Let’s discuss the most straightforward ways to create a payslip as a small-business owner.

Table of contents

What is a payslip?

Also known as a paycheck or pay stub, a payslip is a statement issued to an employee every time they are paid. The payslip details total wages earned for a specific period of time, along with taxes withheld and deductions. For small-business owners, a payslip is a way to ensure your employees are being paid accurately.

Payslips benefit employees, too, helping them better understand their salary. Employees might also need their payslip as proof of income when renting a home or applying for a loan. And perhaps most importantly—many states have laws requiring employers to issue payslips.

What information does a payslip contain?

Because there are no federal laws relating to payslips, formatting can vary greatly from one employer to another. For this reason, it’s best to review local legislation to make sure your company’s payslips are compliant with state laws.

Most payslips include basic company information, employee information, and a breakdown of employee pay. Here is some key information to include on a payslip, regardless of where you live:

  • Employee name and ID
  • Tax period and tax code
  • Employee pay rate (hourly or salary)
  • Gross wages (total amount before deductions)
  • Tax deductions (like social security or pension)
  • Personal deductions (like health insurance or 401K)
  • Net pay (total pay after deductions)
  • Year-to-date pay

How to create a payslip

There are a few different ways to create a payslip, and each method comes with its own set of pros and cons. It’s important to review each option before deciding on the best route for your business needs.

Automated payroll software

The most straightforward way to create a payslip is by using payroll software. This option saves time and minimizes the likelihood of mistakes, which can cause legal ramifications later on. If you already use a payroll program like Gusto, Sage, or Xero, you’ll have free access to a payslip generator within the software. Other programs offer payroll generators for an additional fee.

Payslip templates

Many organizations offer free online templates for small-business owners, which can be imported to Excel or filled in using a PDF editor like Adobe Acrobat.

Here are some of the most popular payslip templates for small-business owners:

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Gusto
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ADP
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SurePayroll
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Learn more about our top brands.

Excel payslip

If you want the freedom to create a completely customized payslip, you can use Excel or another spreadsheet program to do so. You can add your own company logo and use whatever font placement or headings you want, since this is a completely DIY method. Here are the basic steps for making a payslip in Excel:

  1. Make a table. You can borrow a payslip template to get you started or create your own basic table with space for all of the categories you want to include.
  2. Create a section for company and employee information. The top of the table should include a field with your company name, logo, and relevant employee information (like name and employee ID).
  3. Create two sub-tables. Next, create two sub-tables to include employee earnings and deductions. This format makes it easy to compare data across the table. The earnings table should include all income, such as salary, bonuses, overtime pay, etc. The deductions table will include insurance, taxes, etc.
  4. Use formulas to total each sub-table. Formulas enable you to automatically calculate totals once you input numbers in the cells. They’ll save you time when you’re creating payslips for each pay period.
  5. Create a cell for net pay. Finally, it’s time to subtract the gross pay and deductions to get the net pay. This cell shows the take-home pay for the employee, so you’ll want to make sure the formulas are set up properly to ensure accuracy.

The takeaway

Automated payroll software offers the easiest, most streamlined way to create a payslip. Though the software involves upfront costs, this option will pay off in time savings and reduced errors. If you’re not ready to invest in payroll software, there are many free online templates that will save you time when creating payslips. And if you want to customize your payslips to the fullest, you can create one in Excel by using formulas, columns, and rows.

Would you like to learn more about payslips and payroll? Head to Business.org to review The Ultimate Guide to Payroll.

Related reading

How to create a payslip FAQ

How do I make a payslip?

Small-business owners can make payslips using online payslip software, or they can create them manually in Microsoft Excel. Payslips can even be written by hand, although it’s an uncommon, outdated practice. Every state has their own list of payslip requirements, but here is some of the key information included on most payslips:

  • Employee name and ID
  • Tax period and tax code
  • Employee pay rate (hourly or salary)
  • Gross wages (total amount before deductions)
  • Tax deductions (like social security or pension)
  • Personal deductions (like health insurance or 401k)
  • Net pay (total pay after deductions)
  • Year-to-date pay

How do I create a payslip in Excel?

Small-business owners can create a payslip in Excel using a template, or by creating their own custom payslip from scratch. Many companies offer free online templates that can be customized to include a company logo and information relevant to each employee, including employee ID, name, earnings, etc.

Can I print my own payslips?

Yes, if you’re a small-business owner, you can easily print your own payslips by exporting them from Excel and printing with a standard printer and paper. You can also create a PDF format and send payslips to employees via email.

Are handwritten payslips legal?

Payslip laws vary by state. Most states in the US do allow business owners to handwrite their payslips—but electronic or printed documents are more common, convenient, and accurate.

Disclaimer

At Business.org, our research is meant to offer general product and service recommendations. We don't guarantee that our suggestions will work best for each individual or business, so consider your unique needs when choosing products and services.

Brooke Kunz
Written by
Brooke Kunz
Brooke is a copywriter and artisan ice cream enthusiast dwelling in California's sunny Central Valley. She's happiest when hiking in the backcountry, baking an overly complex cake recipe, or reading an engrossing new memoir.
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