We’ve all seen a paystub, but do you know why you need paystubs?
They are actually quite important.
Everyone should hang onto them, but the length of time you need to keep them depends on your position, employer, or employee.
We’ve compiled a list of the 3 most frequently encountered reasons you will be thankful to have your paystubs on hand.
1. Proof of Income
Proof of income is one of the huge reasons for paystubs. You may find that along with a credit check, you are asked to provide multiple most recent check stubs in various money-related situations.
When you’re ready to rent a new place, purchase your first home, need a new vehicle, want a new credit card, or need a loan, you don’t want to be held up over your income.
Any time a significant amount of money is involved, it is expected that the business you are dealing with wants proof that you are bringing in the money to cover your expenses.
2. You Suspect Inaccurate Net Payment
Unfortunately, mistakes happen! If you believe you weren’t paid what your employer owes you, your stub shows all the information you need to know to figure it out.
To put it simply, your check stub shows your gross income, which is your pay before taxes, and your net income, which is what you receive after taxes and insurance are taken out. Various taxes are deducted as well as insurance if elected.
Errors may be found in overtime not paid out, the amount of taxes taken out, which may be too much or too little, or incorrect deductions for insurance, to name a few.
Without having your paystub to reference, proving inaccurate payment is significantly more difficult.
If you are an employer, these are among the same reasons you are required to retain employee stubs for at least four years.
3. Preparing for Tax Filing
If you keep track of what is being taken out of each pay period throughout the year, you won’t be shocked by owing more taxes come tax time. This is a simple way of, again, saving yourself a potential headache.
In the event that you discover enough is not being taken out, you can change your withholdings then so you won’t owe as much, or anything at all.
Finding Your Check Stubs
If you’re just now realizing that you have been discarding your pay stubs or they’re lost somewhere in your house, no need to panic. Because paystubs are universally so important, you have options!
For example, you can use check stub maker to generate your stubs. It’s simple, user-friendly, and eliminates the need to dig for your missing stubs.
Why You Need Pay Stubs
Now you know why you need pay stubs! There are many more reasons than the ones listed above.
Work smarter, not harder. Keep track now so you save yourself the potential hassle later!
Don’t forget to check out our website for more tips, tricks, and information!