Final paycheck laws set when your last wages must be paid and what has to be in that check after you leave a job. Federal law lets an employer wait until the next regularly scheduled payday to issue the check.1U.S. Department of Labor. Last Paycheck Most states go further, with deadlines that often depend on whether you quit or were let go, and the check itself has to cover more than just your last few days of base pay.
When Your Last Paycheck Must Arrive
The federal rule is a floor. States build on top of it, and the timeline almost always turns on how the job ended.
When an employer fires or lays off a worker, state deadlines run from immediate payment on the spot to the next regular payday. Some states require the check within 24 to 72 hours. When you resign, the employer usually gets more time, often until the next scheduled payday or within a set number of business days, and giving advance notice can shorten that window in certain states.
Penalties for missing the deadline vary. Some states charge a daily penalty equal to your regular daily wage for each day the check is late, up to a statutory cap. Others let you recover additional damages through a wage claim. Because the specifics are entirely a matter of state law, your state labor agency’s website is the place to confirm the exact deadline that applies to you.
What Has to Be in the Check
Regular Hours and Overtime
For hourly workers, the base calculation is straightforward: total hours in the final pay period multiplied by your regular rate. Any hours over 40 in a workweek must be paid at no less than one and one-half times your regular rate under federal law.2Office of the Law Revision Counsel. 29 USC 207 – Maximum Hours That rule doesn’t stop applying because it’s your last week. If you clocked 46 hours before being let go on Friday, those six extra hours are owed at the overtime rate.
Salaried Exempt Employees
A salaried exempt worker who leaves partway through a week is not entitled to the full weekly salary. The employer can pay a proportionate amount based on the days actually worked, calculated as a daily equivalent of the full salary.3eCFR. 29 CFR 541.602 – Salary Basis A salaried employee earning $1,000 per week who works three of five days in the final week can be paid $600.
Unused Vacation
Federal law does not require employers to pay out accrued vacation at separation; the Department of Labor treats vacation pay as a matter of agreement between the employer and the employee.4U.S. Department of Labor. Vacations Roughly half of states do require payout of earned, unused vacation, treating it as wages that cannot be forfeited. Whether you’re entitled to a payout comes down to three things: your state’s law, your employer’s written policy, and any employment contract you signed. Even in states without a statutory requirement, an employer’s own handbook promising vacation payout can create an enforceable obligation. Read the handbook before assuming the answer either way.
Commissions and Bonuses
Commissions and bonuses earned before your departure date belong in the final check. The key word is “earned.” If you closed a sale and the commission was calculated before you left, the employer owes it. Bonuses tied to performance periods you completed follow the same logic. Bonuses that require continued employment through a future date, or commissions on deals that haven’t closed, are grayer and often depend on the terms in your compensation agreement.
Deductions Your Employer Can and Cannot Take
Standard payroll deductions continue on a final paycheck: federal and state income taxes, Social Security, Medicare, and any court-ordered garnishments. Those come off the top.
Employer-initiated deductions for unreturned equipment, damaged property, or uniform costs are more restricted. Federal regulations require that wages be paid “free and clear,” meaning employer-required deductions cannot push your effective pay below the federal minimum wage of $7.25 per hour or cut into any overtime you’re owed.5eCFR. 29 CFR 531.35 – Free and Clear Payment; Kickbacks6Office of the Law Revision Counsel. 29 USC 206 – Minimum Wage If you earned $600 in your final week and the employer wants to deduct $300 for a lost laptop, they can only do so if the remaining $300 still meets minimum wage for every hour you worked. Many states impose stricter limits, and some prohibit these deductions entirely without written consent.
Wage advances are handled differently. The Department of Labor has taken the position that an employer can recover the principal of a wage advance even if the deduction drops pay below minimum wage, because the advance was the employee’s own money paid early.7U.S. Department of Labor. Opinion Letter Fair Labor Standards Act (FLSA) Interest or administrative fees on the advance still cannot cut into minimum wage or overtime.
How Final Pay and Severance Are Taxed
Your last regular paycheck is taxed like any other. The employer withholds federal income tax, Social Security, and Medicare, along with any state and local income taxes that normally apply.8Internal Revenue Service. Tax Withholding
Severance pay, if you receive it, is classified as wages for tax purposes and is subject to Social Security, Medicare, federal income tax withholding, and federal unemployment tax.9Internal Revenue Service. Publication 15 (2026), (Circular E), Employer’s Tax Guide Employers often withhold federal income tax from severance at the 22% flat rate for supplemental wages rather than using your regular W-4 rate.10Internal Revenue Service. Publication 15-T, Federal Income Tax Withholding Methods Accrued vacation payouts and earned bonuses paid out with the final check also count as supplemental wages and are typically withheld the same way. That withholding is an estimate, not a separate tax. Your actual liability is settled when you file your return, and you may owe more or get a refund.
If the Amount Looks Wrong
Gather Records Before You Lose Access
If you suspect the final check will be short, pull records before your accounts are cut off. Download paystubs from the last three to six months so you can compare your normal earnings against what arrives. Save the employee handbook, especially the sections on vacation payout, bonuses, and commissions. Keep any signed employment contract handy.
A termination notice or a timestamped resignation letter fixes the separation date, which starts the clock on the payment deadline. Access to company email and HR portals often disappears quickly, so grab what you need on your last day. If you worked irregular hours or unpaid overtime near the end, keep a personal log with dates and times; notes written the same day carry far more weight later than reconstructed memories.
Ask the Employer First
Start with a written request to payroll or HR. State what you believe is owed, explain the discrepancy, and set a reasonable deadline for correction. Many paycheck errors are genuine mistakes and get fixed at this step. Keep copies of everything.
File a Wage Claim
If the employer refuses or ignores you, the Department of Labor’s Wage and Hour Division enforces federal wage laws. You can reach WHD at 1-866-487-9243 or file through their website, and complaints are confidential.11U.S. Department of Labor. How to File a Complaint12Worker.gov. Filing a Complaint with the U.S. Department of Labor’s Wage and Hour Division (WHD)
Most states also have their own labor agencies that handle wage claims under state law, and state claims can sometimes recover penalties the federal process cannot. You are not limited to one path; filing with both the state agency and the federal WHD is common and often advisable. Expect the process to take anywhere from several weeks to several months.
Liquidated Damages
When an employer fails to pay minimum wages or overtime, the FLSA makes the employer liable for an additional amount equal to the unpaid wages as liquidated damages, effectively doubling the recovery.13Office of the Law Revision Counsel. 29 USC 216 – Penalties A $2,000 overtime shortfall on a final check can yield $4,000. An employer can avoid liquidated damages only by proving to a court that it acted in good faith and had reasonable grounds for believing its conduct was lawful.14Office of the Law Revision Counsel. 29 USC 260 – Liquidated Damages
The Filing Deadline
You have two years from the date of the violation to file a federal wage claim under the FLSA, or three years if the violation was willful.15Office of the Law Revision Counsel. 29 USC 255 – Statute of Limitations “Willful” generally means the employer knew it was violating the law or showed reckless disregard for whether it was. State deadlines vary and may be shorter or longer, so check both. Evidence gets stale and employers sometimes lose payroll records after a couple of years, so filing sooner is always better.
Retaliation Is Illegal
Federal law makes it illegal for an employer to fire, demote, or otherwise punish you for filing a wage complaint, participating in an investigation, or testifying in a wage-related proceeding.16Office of the Law Revision Counsel. 29 USC 215 – Prohibited Acts A worker who is retaliated against can recover lost wages and an equal amount in liquidated damages, along with reinstatement or other relief.13Office of the Law Revision Counsel. 29 USC 216 – Penalties
Before You Sign a Severance Release
A severance agreement is not the same as your final paycheck. Your employer owes you earned wages whether or not you accept severance, and conditioning earned pay on signing a release is not permitted under the FLSA.
If you are 40 or older, federal law imposes specific requirements on any release that waives age discrimination claims. The release must be written in plain language, must advise you in writing to consult an attorney, and must give you at least 21 days to consider it, or 45 days if it is part of a group layoff. You also get a seven-day revocation period after signing, during which you can back out and the agreement is not enforceable.17eCFR. 29 CFR 1625.22 – Waivers of Rights and Claims Under the ADEA A release that skips any of these steps is not valid. Even if you are under 40, review any offer carefully. Once a valid release is signed, the claims it covers are generally gone for good.