its or it's?

These two terms cause confusion even for native speakers. In fact, using them wrongly may be the Number One Error in English! But they are actually quite easy to use correctly, when you understand the rule. Note that their pronunciation is identical (exactly the same).

its = possessive form of it
it's = short for it is, it has

its

The word its is a possessive adjective for things and animals, similar to his and her:

The boy broke his leg.
The girl broke her leg.
The dog broke its leg.

Here are some example sentences:

The company pays its workers on Fridays.

My car needs to have its tyres checked.

A chain is as strong as its weakest link.

it's

The term it's is a contraction, short for "it is" or "it has".

Here are some example sentences:

it is	It's late.
	I wonder why it's so cold.
	It's not raining.
	They can't come because it's snowing.
it has	It's been raining for hours.
	Do you think it's arrived?
	I hope it's got a bathroom.

In it's, the apostrophe (') shows that something is missing:

it is
it has