17.09.2021
Taxation
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When processing payroll, employers and corporate accountants must also produce pay stubs. These documents contain a variety of information about employees’ pay.

Why are pay stubs important? What information are employers required to include? Find out in this article.

What are pay stubs for?

In corporate accounting, pay stubs containing the details of employees’ pay are issued with each paycheque. Pay stubs provide important information for employees, who can use them to check whether they are being paid the correct amount.

Errors can occur during payroll processing, so pay stubs give employees the opportunity to correct them.

Pay stub requirements in Quebec

In Quebec, employers are legally required to include certain information on pay stubs.

The required information can be divided into three categories: employer and employee identification, salary information and deductions.

Employer and employee identification

The required employer and employee identification information is as follows:

  • Employer’s name
  • Employee’s first and last name
  • The title of the position
  • Payment date
  • The work period the payment corresponds to

Salary information

There is also important salary information that must be included on the pay stub:

  • The number of hours paid at the normal rate
  • The amount of overtime paid
  • The amount of overtime replaced by time off with the applicable rate
  • The type and amount of any bonuses, allowance, benefits or commissions paid
  • The hourly rate
  • Gross pay 
  • Net pay
  • The tips declared by the employee or provided by the employer (if applicable)

Deductions

Finally, the pay stub must include all relevant information about the employee’s pay deductions. Some deductions such as employer payroll taxes are mandatory for all employees. There may be others as well, depending on the industry and the company in question.

Here are the deductions (mandatory deductions for all employees are listed in bold):

  • Quebec and federal income tax
  • Contribution to the health services fund (HSF)
  • Contribution to the Québec Pension Plan (QPP)
  • Contribution to the Québec Parental Insurance Plan (QPIP)
  • Employment insurance (EI) premiums
  • Contribution to the company’s pension plan
  • Contribution to the company’s group insurance plan
  • Union dues

For more information about corporate accounting, contact T2inc

Employers must respect the standards set by government authorities when producing their employees’ pay stubs. The information presented in this article must be clearly indicated on the pay stubs so that employees are able to see the breakdown of their salary.

Do you have further questions about corporate taxes or accounting? Feel free to contact us!

Frédéric Roy-Gobeil

CPA, CGA, M.Fisc

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