Contractions always use an apostrophe. Possessive pronouns never use an apostrophe. Look at these examples:
I know it’s cold today.
The word it’s is a contraction for the words it is. Use an apostrophe in the contraction.
The cat licked its paws.
The word its is a pronoun showing ownership. The cat owns its paws. Do not use an apostrophe to show ownership with a pronoun.
If you’re cold, put on a coat.
The word you’re is a contraction for you are. Always use an apostrophe in a contraction, replacing the letters that were taken out.
You left your coat at school.
The word your is a possessive pronoun showing ownership. No apostrophe in a possessive pronoun.
Mom and Dad said they’re coming home soon.
The word they’re is a contraction of the words they are. We need an apostrophe in every contraction.
Mom and Dad left their boat at the dock.
The word their is a possessive pronoun. There is no apostrophe in a pronoun.
Use an apostrophe in every contraction. Never use an apostrophe to show ownership with a pronoun.
▶It’s your turn. Should you use its or it’s in this sentence? John said ____ raining outside. Did you choose the contraction with an apostrophe? Good for you!