Reasons Why You Might Need a Pay Stub

As an adult, you have dozens of responsibilities to take care of—taxes, rent, mortgages, etc. This usually involves keeping track of important paperwork. Understandably, you might not know which documents are vital. Many employees throw away their pay stubs. Others, especially those who work on a freelance basis, do not even receive stubs. But, what exactly is a pay stub? In a nutshell, a pay stub is a breakdown of your earnings, detailing your gross income, the taxes your employer withholds, and any other deductions. As pay stubs include vital information, there are some situations where you will be asked to submit a copy of your last one. To learn more, check out the following points. 

To Make Sure That You aren’t Underpaying Taxes

Filing your tax return is certainly a headache, so it only makes sense that many people dread tax season. Yet, do you know what can make this process much more complex? Not having a copy of your most recent pay stub. Not only do pay stubs allow you to get an accurate estimate of your net earnings, but the information they include will also help you ensure that you are not underpaying. After all, how can you make sure that your employer is withholding the right amount if you do not regularly check your stubs? Of course, since the IRS announced hefty penalties for underpaying individuals, a mistake as simple as not collecting your pay stubs and checking them for any irregularities can cost you hundreds of dollars in fines. 

To Take Out Loans

Every once in a while, you may need to take out a loan for quick liquidity. However, the process of applying for a loan involves many steps other than simply finding a trustworthy creditor and filling in some paperwork. As all reputable lenders require proof of income, you will need to submit your last pay stub to assure them that you will be able to cover future installments. If you do not have such proof, you may find yourself settling for shady creditors, which is something you must avoid at all costs. So, ask your employer to get you a copy of your last pay stub if you have lost yours. On the other hand, you can use a fast pay stub maker in case you are a freelancer. Whatever your situation may be, just make sure that you have this crucial document at hand before applying for a loan to up your chances of getting approved.

To Rent

Not all people have the luxury to have their own houses. Others prefer to rent an apartment close to their workplace. Regardless of why you prefer renting, your landlord will need proof that you are making enough money to pay for the place you are going to stay in. This is why having a pay stub can come in handy. In addition to proof of identification and your latest tax return, pay stubs are at the top of the list of documents you will need to rent an apartment. So, if you want to prove to your would-be landlord that you will be a responsible tenant, include your last pay stub in the paperwork you are going to submit.

To Receive Compensation

Although most people do not like thinking about what might happen if they sustain crippling injuries, it does not hurt to be always prepared. Life is pretty unpredictable, and anything can happen at any moment. If you ever end up losing your job due to an injury, it is your right to demand fair reimbursement to be able to maintain your current quality of life and meet all your financial commitments. Without a recent pay stub, insurers would not have proof of your past income or be able to determine how much money you are owed. This is why most lawyers advise people to keep their pay stubs; they function as an extra layer of protection in case anything goes south.

To Open a Bank Account

Whether you do not already have a bank account and wish to create one or you want to open a new account in another bank, you will be asked for proof of identity. However, this requirement is not met by merely flashing your ID. Financial institutions usually ask for clients for their social security numbers as well. All this information is included in pay stubs, so depending on the bank you choose, you may need to present a recent one.

Some people think that pay stubs are a mere formality that comes with each payday. As you are well aware now, this is simply a misconception. Pay stubs are required for calculating your tax liability, applying for a loan, opening a bank account, and renting accommodation. If you do not get a pay stub every month, ask your employer to print you a copy or use an online tool to get the job done.