Last updated: October 15, 2026
Issuing a final paycheck is one of the highest-stakes payroll tasks a small employer handles. Get the contents or the timing wrong and you can face penalty wages, complaints, or lawsuits. Here’s what belongs on the last stub and how to get it right.
A final pay stub carries everything a regular stub does — employee and employer details, the pay period, gross pay, each deduction, net pay, and year-to-date totals — plus separation-specific items. Include wages or salary through the employee’s last hour worked, any overtime earned, and commissions or bonuses already earned under your policy. If your state requires it, add accrued unused vacation or PTO as its own clearly labeled line. Mark the stub as the final payment so there’s no ambiguity later about what was paid and when the employment relationship ended.
Whether unused vacation must be paid out depends on where you operate. California, Colorado, Illinois, Montana, and several other states treat accrued vacation as earned wages — you must pay it in full at separation, and “use it or lose it” policies are unenforceable there. In many other states, payout is only required if your written policy promises it. Before you run final payroll, confirm your state’s rule and your own handbook language. This single issue generates more small-business wage claims than almost any other.
Final-paycheck deadlines vary dramatically. California demands immediate payment at termination (and within 72 hours for a quit without notice), with daily penalty wages for each late day. Most states are more forgiving, allowing payment on the next regular payday, but a handful have special rules for layoffs. Look up your state’s deadline before the employee’s last day, not after. When in doubt, pay sooner — early is never penalized.
Required withholdings — federal and state income tax, Social Security, Medicare — still come out of final pay. What you generally can’t do is dock the check for unreturned equipment, register shortages, or disputed debts without the employee’s written authorization, and even then only where your state allows it. Pay the wages owed in full and resolve other issues separately. Then archive the final stub with your payroll records for at least three to four years — it’s your best defense if questions arise later.
Issue a clean final paycheck stub
Generate an itemized final pay stub with PTO payout line and full deductions. First stub free, no sign-up.
Generate my free pay stubA final pay stub should show everything a regular stub shows, plus anything owed at separation. That means wages or salary through the employee’s last hour worked, any accrued and unused vacation or PTO payout your state requires, overtime earned, commissions or bonuses already earned, and all standard deductions (taxes, Social Security, Medicare). It should be clearly marked as the final payment so both you and the employee have a clean record.
It depends on your state. California, Colorado, Illinois, and several others treat accrued vacation as earned wages and require a full payout at separation. Many other states only require it if your company policy promises it. Check your state’s labor rules before issuing the final check — getting this wrong is one of the most common wage claims small employers face.
Timing rules vary sharply by state. California requires immediate payment when you terminate an employee (and within 72 hours when they quit without notice). Most other states allow payment on the next regular payday. A few have special rules for layoffs or large reductions. Look up your state’s deadline — late final paychecks can trigger daily penalty wages in strict states.
Standard required deductions — federal and state income tax withholding, Social Security, and Medicare — still apply to final pay. You generally cannot deduct unreturned equipment, cash shortages, or alleged debts from the final check unless the employee has given written authorization and your state permits it. When in doubt, pay the full wages owed and handle any dispute separately.
Yes. Issue the final payment with its own itemized stub, clearly dated, showing the pay period through the last day worked and any PTO payout as a separate line. A dedicated final stub prevents confusion months later when the former employee — or an agency — asks what was paid and why. Keep a copy in your payroll records for at least three to four years.
Your obligation to pay on time doesn’t disappear because the employee is hard to reach. Mail the final check to their last known address, or use direct deposit if that was their normal payment method and your state allows it. Document every attempt to deliver payment — that paper trail protects you if a wage claim is ever filed.
Sample documents for personal record-keeping. Not tax advice — verify calculations with your payroll provider or tax professional.