Regardless of what sector you work in or the kind of company you are employed by, you should be receiving regular check stubs.
Check stubs, also known as paystubs or pay cheques, are a vital document that is usually provided to employees along with their salary payment. This means they are usually given out every month or week, based on the pay schedule of your workplace.
Even if you work on a freelance basis or for a small start-up, you should be receiving some kind of paystub as it contains a lot of important information.
This proof of income is required for a range of circumstances and contains some of the most important details of your working life. In this short guide, we are explaining why we need paystubs and what goes into making one.
Why Are Paystubs So Important?
Paystubs are proof of income as they show not only what you have earned over a specific period but also other essential information related to your salary.
Proof of income is required for many different things, and most of these require a paystub, as this is the best way to prove your salary and that you are earning a regular income.
With that in mind, the following examples are some of the most common reasons why you may need proof of income:
- Applying for a loan, including opening credit cards
- Applying for a mortgage
- Signing a new rent agreement
- Making a large purchase
- Filing your taxes
- Applying for insurance or other financial aid
Providing proof of income is a way of securing a purchase of any kind because it shows the provider that you can pay back what you have borrowed or make the required payments.
While there are other ways you can provide proof of income, a paystub is the most popular method and also makes it easier to do this. A pay stub is a widely recognized document that can give you access to what you need, whether you are working with a bank, insurance provider, or sales company.
Information Included on Every Paystub
No matter who you work for or the job role you have, all paystubs follow a similar pattern.
They all provide the same information regarding your salary, tax, and deductions, regardless of whether they are paper paystubs or online check forms. This includes:
- Federal Tax
- State Income Tax
- Medicare and Health Insurance
- Life Insurance
- Gross Earnings to date
- Year to Date Code, which shows the document is up to date
All of these are required as proof of income, and all paystubs should contain this information in some way. These are usually noted as abbreviations on the paystubs, which may vary based on the way your business produces these documents.
While each paystub contains the same information, each employee has different information, and therefore no two documents are the same.
Companies need to provide all employees with their own paystubs containing their salary amounts and the deductions that apply to them.