Lenders evaluate loan candidates by looking at your financial history. They don’t want to lend money to someone unlikely to pay it back. The best way to show that you can pay back a loan is by showing check stubs. These stubs show how much money you make each pay period, so the lender knows what you’re capable of paying back.
What Is a Pay Stub?
A pay stub also called a check stub or payslip is a record of your income. It shows the hours you worked and how much your employer paid for that time. The basic amount of how much you work and what you receive to pay for is your gross earnings.
A pay stub includes information about taxes taken out by the federal government. Taxes are withheld on a federal level, but your state might also have an income tax that shows up on your pay stub. FICA tax includes Medicare and Social Security, so you’ll see a space for this on your check stub as well.
If your employer takes money out for insurance, that amount is on the stub, along with any contributions you make to a retirement account or pension.
Once you see everything taken out of your check, you’re left with the net pay. This amount is what is actually put into your bank account.
Even if your employee pays you through direct deposit, you should still get a pay stub to prove your earnings. Not all states require employers to provide check stubs, but they must keep a record of how much you work and how much you receive.
When Is a Pay Stub Needed?
While a pay stub is helpful for keeping track of your finances, especially at tax time, it’s also used as proof of employment. There are many situations where you might have to prove that you have a job or show how much you make each pay period.
Anyone shopping for a new car, whether you intend to buy or lease, will need to show that they’re financially stable enough for this expense. Pay stubs don’t just show the money you made in one period but also your year-to-date total. This figure gives lenders an idea of how long you’ve been at the job and how your earning potential might change.
People trying to buy a house will need proof of income to secure a mortgage. Since buying a home is such a significant endeavor, the lender will look at your bank statements as well, but a pay stub provides helpful information.
If you’re trying to rent an apartment, condo, or house, your landlord will want to see pay stubs. They want to make sure you’re able to pay rent on time each month. You might even need these pay stubs to set up utilities and other services at your new address.
You’ll also need a pay stub when you’re trying to get a loan. Whether you’re using that loan to buy a house, car, or start a business, proof of income is crucial for the lender.
Can I Get a Loan With Check Stubs?
Yes, lenders prefer to see check stubs because they prove you have a reliable income. It helps them decide if they should risk loaning you money based on how likely they think you are to pay it back.
The problem arises for people whose employers don’t provide check stubs or self-employed people. You can show a bank statement to prove you have money saved. The lender won’t know that you’ve earned that money yourself and have the means to continue earning more unless you also have a check stub.
If you work at an organization that doesn’t give pay stubs and doesn’t have an HR department, you might not know how to get a check stub. If you’re self-employed or a freelancer, you likely never get a pay stub. You might get checks and invoices, but you need to turn this into proof that you make money regularly.
Making Your Own Pay Stubs
Making your own pay stub is the solution to all these problems. Professional accountants developed various online paystub generators, so you know you’re getting a quality check stub. You have to input your financial information and pick a template.
You’ll input your employer and employee information for the check stub header. Then you’ll add your salary and the pay period. The software calculates everything immediately, breaking down your rate per hour.
The program even calculates your taxes withheld depending on your state. If you get health insurance, you can add that information as well. The pay stub will show your gross pay, the deductions, and your net pay. There’s also a space for the year-to-date totals for each category.
You can use the paystub creator often and keep a record of your pay over several periods. You’ll pay a small fee per pay period to access and print the pay stub. There’s no wait time for this service—after you enter the information, you can preview the document. When it’s finalized, it’s emailed to you instantly.
If you’re a freelancer or self-employed, your pay stub is valid as soon as you get the final document. People employed by a company might need the manager, owner, or HR representative to sign the document to make it legal.
Enter all information correctly to ensure your pay stub is legal. You can’t fudge your finances to get a loan because the lender will most likely check your bank statements as well. The information you enter on the site is secure, so you don’t have to worry about anyone having access to your employer, employee, or financial details.
Having a pay stub is helpful if you need proof of employment for various services. It’s also crucial to secure a loan. If your employer doesn’t distribute check stubs or you’re a freelancer, The paystub maker will make a professional pay stub for you. It’s all online, completely secure, and is available immediately through email. Create your paystubs now!