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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.

What Is The Purpose Of A Pay Stub?

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.   

Elements Included On Your Pay Stub

Here’s a basic rundown of the things you’ll find on the everyday pay stub in Canada:

Year To Date

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.

Gross Income 

This is the full amount that you’ve earned for your most recent pay period before any deductions are withdrawn from it (taxes, CPP/QPP, etc.).  

Employment Insurance (EI)

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.   

Canada Pension Plan (CPP)/ Quebec Pension Plan (QPP)

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). 

Vacation Pay

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.  

Net Pay

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. 

Other

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:

How To Read The Abbreviations On Your Pay Stub

Here’s some of the terminology that you might find on a Canadian pay stub:  

Pay Stub Abbreviation Definition
CPP/QPPCanada Pension Plan/Quebec Pension Plan
SINSocial Insurance Number 
EINEmployee Identification Number
(H)Hourly Wage
(S)Salary
Ad EarnAdditional Earnings
AdjAdjustment
DI/DBDisability Insurance/Death Benefits
ExpExpenses
PenPensionable
Non-Pen/N-PenNon-Pensionable 
Non Eli/EligNon-Eligible 
LWOPLeave Without Pay
LIALeave With Income Averaging 
LSLump Sum
Ter EETerm Employees 
NTNon-Taxable
VacVacation
OTOvertime

The Difference Between Your Pay Stub And Your Paycheck

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:

  • Your employer’s name, address and postal code
  • “PAY TO THE ORDER OF” followed by your name (as the payee)
  • The amount of pay in numbered and written form 
  • The name and address of your employer’s financial institution
  • An optional “memo” section for extra notes or details 
  • The cheque’s 8-digit identification number (transit #, institution #, account #)  
  • Your employer’s or manager’s signature of approval

What If There Is An Error On Your Pay Stub? 

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:

Inform Your Manager

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:

  • A salary change, leave without pay or other pay transaction
  • A letter of order, retirement package or other issue that concerns HR   

Pay Stub FAQs

How long should I keep my pay stubs?

Once you’ve received your pay stub, don’t forget to hold it in your records until it’s possible for you to reconcile them with annual reports. According to the Canada Revenue Agency, this means 6 – 7 years, since that’s how long most companies may review tax or support documents.   

Is my employer required to provide me with a pay stub?

Section 27 of Canada’s Employment Standards Act states that employers have to give workers a written statement displaying their wages (also known as a pay stub), whether physically or electronically. This statement must contain most of the information above particularly the employer’s name and address, the hours worked and the wage rate.   That said, your employer doesn’t have to issue you a new pay stub if the statement is the same for each pay period. This is only required when a change of wage is in order. 

What is QPIP?

If you work in Quebec, it’s essential to understand that your wage deductions may be slightly different than you would see on a pay stub from another province or territory.  For instance, all Quebec employees, employers and self-employed workers must pay a percentage of their gross income to fund the Quebec Parental Insurance Plan (QPIP), which is an income replacement that supports parents with newborn children. The amount deducted from your pay for the QPIP depends on your position and the year.

What Should You Do With Your Pay Stub?

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.        

Bryan Daly avatar on Loans Canada
Bryan Daly

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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