When you apply to take out a loan or rent a dwelling, lenders and landlords will often ask you to provide at least one recent pay stub from your current job. This is to learn whether or not you have steady employment and what your average monthly income is. Both of which are often used to confirm the likelihood of you making your potential rent or loan payments on time.
Despite the fact that the vast majority of adult Canadians receive a pay stub at least once a month, many individuals don’t actually understand what their pay stub is, other than something that indicates how much money they earn. Read this article to learn what pay stubs are and what kind of information they hold.
Also known as payslips, paycheck stubs, or wage statements, a pay stub is a written document that records your earnings for each payment term you work (this usually occurs on a weekly, bi-weekly, or semi-monthly basis). Although it’s less common, those who work odd jobs like seasonal workers, contract employees, or consulting positions may receive pay stubs too.
If you work for an employer who gives out physical paychecks, you’ll find your pay stub attached to the bottom or included on a separate document, while businesses that offer direct deposit will normally make your pay stubs available on some sort of online portal or may send them to you via a personal email address. Pay stubs are important for clarity, accountability and, of course, payroll compliance.
Here’s a basic rundown of the things you’ll find on the everyday pay stub in Canada:
This refers to the full amount of pay and deductions you’ve earned as an employee from the start of the year up until the specific pay period you’re in.
This is the full amount that you’ve earned for your most recent pay period before any deductions are withdrawn from it (taxes, CPP/QPP, etc.).
During a pay period, employees and employers must contribute to this fund, which gives workers temporary payments when they become unemployed for eligible reasons, like illness or pregnancy. EI is available for self-employed workers who meet designated premiums and conditions too.
A portion of the employer and employee’s gross incomes will also be deducted to contribute to CPP, which provides income for workers who retire, become disabled or require survivor benefits. Generally, employees pay 4.95% of their income (9.99% when coupled with EI deductions).
Some pay stubs include a deduction of 4% – 6% for vacation pay, which your employer will keep in a separate fund and add to your paycheck when you take time off. Most casual and part-time workers get vacation pay on each paycheck, while full-timers may receive 2 – 3 weeks of vacation payments yearly.
The last line of your pay stub indicates the total amount of earnings you’re entitled to for that pay period after all deductions have been withdrawn.
Depending on where you’re employed and which province or territory you’re working in, you may see other deductions on your pay stub, such as:
Here’s some of the terminology that you might find on a Canadian pay stub:
| Pay Stub Abbreviation | Definition |
| CPP/QPP | Canada Pension Plan/Quebec Pension Plan |
| SIN | Social Insurance Number |
| EIN | Employee Identification Number |
| (H) | Hourly Wage |
| (S) | Salary |
| Ad Earn | Additional Earnings |
| Adj | Adjustment |
| DI/DB | Disability Insurance/Death Benefits |
| Exp | Expenses |
| Pen | Pensionable |
| Non-Pen/N-Pen | Non-Pensionable |
| Non Eli/Elig | Non-Eligible |
| LWOP | Leave Without Pay |
| LIA | Leave With Income Averaging |
| LS | Lump Sum |
| Ter EE | Term Employees |
| NT | Non-Taxable |
| Vac | Vacation |
| OT | Overtime |
Remember, a pay stub is a written statement you get with your paycheck. It’s basically a record of your weekly, bi-weekly, or semi-monthly wage payments for a particular payment term, as well as how those wages are calculated and what deductions are taken from them. If you don’t have direct deposit at work, you’ll probably get your pay stub in paper form.
However, a paycheck or paycheque is a physical cheque that your employer gives you, which you’re free to deposit at your financial institution (when direct deposit isn’t set up) as soon as you receive it. On your check, you’ll see all this other essential information:
After you get a paycheck, it’s a good idea to keep your pay stub for future needs, like possible tax purposes (though most businesses will give you a T4 slip summarizing your income for that year). It’s also smart to check it for mistakes, such as the wrong name, account number or wage, any of which can cause problems with your payment.
So, if you find an error on your pay stub, here’s what you can do to resolve it:
Start by telling your manager about the mistake. They should be able to help you through your department’s human resources (HR) process and figure out which solution will work best for your situation. This step is especially important if the pay stub error is related to:
Your pay stub is an important item for your tax and financial records, no matter where it comes from or what amount of money it’s for. So, keeping the original document, as well as a physical or electronic copy is always better than throwing it away. On top of that, you’ll be able to examine your pay stub for errors and make sure you’re being paid fairly.
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Bryan is a graduate of Dawson College and Concordia University. He has been writing for Loans Canada for five years, covering all things related to personal finance, and aims to pursue the craft of professional writing for many years to come. In his spare time, he maintains a passion for editing, writing screenplays, staying fit, and travelling the world in search of the coolest sights our planet has to offer.
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