The 123PayStubs Time-Off Feature — Keeping Your Paystubs Compliant

Managing time-off policies is one of the more nuanced parts of running a small business payroll.

Across the country, an expanding number of states and municipalities now legally require employers to display accrued, used, and remaining paid leave balances directly on employee paystubs.

Getting this right is not optional — it is a compliance requirement with real penalties for non-compliance.

Why Time-Off Tracking on Paystubs Matters in 2026

As of 2026, paid sick leave laws are in effect in the majority of U.S. states.

Several states explicitly mandate that paid leave balances be shown on employee paystubs or an accompanying wage statement, including:

• California
• Colorado
• Connecticut
• New York
• New Jersey
• Illinois
• Maryland
• Massachusetts
• Oregon
• Washington

Additional states and cities continue to adopt similar requirements each year.

Even in states where it is not legally required, showing time-off balances on paystubs is recognized as a best practice. It eliminates employee confusion about available leave, reduces HR inquiries, and demonstrates transparency — all of which contribute to a healthier workplace.

What Time-Off Tracking Should Show

For compliance and clarity, a paystub’s time-off section should display:

• Starting balance for the current period
• Hours accrued during the current period
• Hours used during the current period
• Ending available balance
• Type of leave, such as vacation, sick leave, or PTO

Different businesses accrue time differently. Some grant a lump sum at the start of the year, others accrue per pay period, and others use a hybrid model.

The display format on the paystub should match how your policy works.

How 123PayStubs Handles Time-Off Policies

123PayStubs includes a dedicated Time-Off Policies add-on directly within the paystub creation workflow.

Here’s how to use it:

1. Sign in and begin creating a paystub as normal, entering company and employee information.
2. Select the Time-Off Policies add-on option.
3. Add as many policies as needed, such as vacation, sick leave, or PTO. 123PayStubs does not cap the number.
4. Enter the policy name, starting balance, hours used, and hours accrued for the period.
5. 123PayStubs automatically calculates the ending balance and displays all values clearly on the paystub.
6. Download or email the completed paystub to your employee.

The platform handles the arithmetic. You manage the policies. Your employees see exactly where they stand every pay period.

Staying Ahead of Changing Leave Laws

State and local paid leave laws are among the most actively evolving areas of employment compliance.

New requirements are added regularly, existing laws are amended, and accrual or usage caps change year to year.

The safest approach is to audit your state’s requirements at least annually and ensure your paystub documentation aligns with current mandates.

Display Time-Off Balances Clearly with 123PayStubs

Whether your state requires it or you simply want to run a more transparent operation, 123PayStubs makes it easy to document and display your time-off policies professionally and accurately. Visit 123PayStubs.com to explore all available features.