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Exploring Situations Where You’ll Need a Pay Stub



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Whether you’re an independent contractor or an employee, a pay stub is a crucial document. It’s given to you along with your paycheck. Pay stubs, which also serve as proof of income, typically outline your gross pay and deductions and give you your net pay amount. They also cover health insurance payments, tax withholdings, FICA taxes, retirement funding, and more. This article will discuss how you create pay stubs and situations that require pay stubs. 

How Are Pay Stubs Created?

If you’re an employee, your employer will create your pay stub for you but suppose you’re self-employed and running your own business. To learn how to make a pay stub instead, determine the information needed: payroll cycle (how much salary is paid every payroll date), wages (net and gross pay), tax withholdings, and benefit withholdings. You also need company details, such as business name and address. If you have your own employees, then you need their social security number, name, and address. Consider using the following services to make the job easier for you: 

  • Pay stub generators
  • Payroll software
  • Paystub templates
  • Google Docs
  • Microsoft Word 

Situations That Require a Pay Stub 

These are a few cases in which you may need a pay stub document for verification: 

Personal and Auto Loans

A proof of income document is needed when taking out a personal or auto loan to ensure you can repay the loan. 

Some lenders may ask for more than one month’s pay stub, while others may only ask for a recent one. Your pay stub can also support your loan application.

Accident Compensation

In case of an injury or disability resulting from an accident that leaves you unable to work, a pay stub serves as proof of income to calculate your lost wages and help you receive adequate compensation. 


Your pay stubs help make filing taxes easier. Last year’s pay stub will show how much you paid in taxes, if you have health benefits, and the income received. You can also use it as proof of taxes if there is a discrepancy with a W-2. It further helps minimize penalty and audit risks. Your pay stub shows taxes withheld from earnings, such as: 

  • Federal income tax: The federal government collects this tax, and the amount collected can vary according to filing status, income level, and allowances claimed in the W-4 form. 
  • State income tax: withholding is based on your income and the state’s tax rate

Social Security and Medicare taxes, also known as Federal Insurance Contributions Act Taxes or FICA, show retirement benefits and fund senior’s healthcare and are calculated as a percentage of gross pay. Understanding these can help with tax planning and budgeting and ensure you don’t owe a huge amount when filing tax returns. 

Renting and Refinancing a Mortgage

Apartment complexes or landlords often ask for proof of income when you’re renting a new apartment or home to ensure you have the financial means to live there; they often ask for several weeks’ worth of pay stubs to check how long you’ve been working, how much you’ve earned, and more. 

Having more extended employment with a particular company makes it easier to get approved because, recently, starting a job doesn’t show a steady income flow. Lenders require pay stubs as proof of employment if you wish to refinance your mortgage to help save money. 


Creating a pay stub should only take a few minutes, especially if you’re using an online service such as a pay stub generator. All you need is to gather the appropriate and correct information, so make sure both the information you have and the company you’ve chosen are right.

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