Presented by paystubmakr.com your best online pay stub generator 08-01-2019
This article will review what pay stubs are, why we need a pay stub. For what we can use them, and how pay stubs can leverage our credit. We will find too how can make them online fast and easy.
What is a paystub? What are the deductions and withholdings that appear on it?
If you work as an employee or self-employed, you get paid or pay yourself every week or two, your paycheck. According to the law, you have to get or make for yourself an earning statement or in the words that describe the actual piece of paper called pay stub. On this pay stub, you can see the information of the employer’s name and address and the employee’s name, SSN, and address.
The payment information has to be detailed with the rate per worked hour, the total hours worked for the related pay period and the balance to be paid, which is called to the gross payment. From the gross amount, you have to deduct your federal and state taxes and social security and health insurance. You can read about the legal base for these obligations here. Employee rights: Below are the pay stub deduction codes, and what they stand for:
- FICA – Federal Insurance Contributions Act
- YTD – Year-To-Date
- FL – Family Leave
- FWT – Federal Withholding Tax
- SWT – State Withholding Tax
- INS/MED – Insurance or Medical deductions
- 401k/Ret – Retirement contribution
Below are the four mandatory deductions that you must see on all pay stubs
- Federal tax withholding
- State tax withholding
- FICA – Medicare
- FICA – Social Security
Who needs to Issue a Pay Stub?
According to “Freelancing in America” study the freelancer’s workforce has reached 56.7 million people. If you are one of those freelancers, you will need earning proof like a pay stub.
Employers need to issue and deliver it to their employees, a pay stub for each paycheck they make on the payday. The gig economy workers or independent contractors are responsible for issuing their pay stubs. It is easy to create here
If you are a gig economy worker or another self-employed or small business owner, you will need some knowledge on taxation to be able to manage the withholdings to make a correct paycheck and the related pay stubs. Do not worry. The online software will automatically calculate for you all the deductions required by law.
Why do You Need a Pay Stub as an Employee
- Renting a place to live Apartment Application: Items You’ll Need. Landlords will ask to see your last two or three pay stubs to see if you can afford the rent. The parameter is that the lease will not be more than 30% of your earnings. If you are an employee, your employer will have your pay stub or a copy of it. In the case that you are a gig economy worker, you may create your pay stub here.
- A car loan. The lender of automobile loan will request recent pay stubs to verify income. Also, you can be asked for bank statements and credit score.
- Small loans will have a few requirements together with your pay stubs from recent pay periods.
- To obtain a credit card, your bank will ask for pay stubs and other proofs of your credit.
- Earning proof for insurance will be the base for any case that the insurance company will have to pay you for disability or other loss of capacity to work and get your paycheck.
- Keep the record so you will have in hands in case of disputes. You better have your paystub kept in a safe place until they lose their value as proof.
- Keep a record to use when you have more than one income sources, and you will need the hard proof for your tax return.
- If you have childcare, the pay stub will be your receipt for paying your obligation.
What are the Employers Needs of a Pay Stub?
- Keep a record for the book-keeping
- Legal obligation to the employee, An employer has a legal obligation to issue a pay stub on the employee’s request.
- Have a receipt to prove that he paid the employee.
How To Get a Car Loan with your pay stubs
Before you start looking for a car and a car dealer, check your credit score and your earning proofs.
Auto lenders will verify your income and employment
Any lender that you wilñl ask for a loan will make sure that you make enough money to pay back the loan. It is not enough that they have the car itself as collateral. Lenders look for the benefits of having a borrower that will pay back the loan and their profit called interest.
Your employment for the future has to be assured and you salñary as it is shown on the pay stub and verification should be enough for you to keep your standard of living and payment of the loan and its interests.
- A lender will make an Income Verification
Lenders will verify earnings when evaluating an auto loan application. After confirming, your salary, they will be able to land you no more them a loan that its monthly payments are not more than the 10 to 15 percent of your net salary pay.
There are three general guidelines to determine and validate your total earning.
- Credit scores – Borrowers that get high credit scores (above 700) can often obtain a car loan without corroborating salary. Those who apply for a loan but get lower scores must offer verification of their earnings and show that they can pay the installment on time.
2. Purchase price – Naturally, the lower is the vehicle’s price, the easier is to get the loan.
3. Down payment – The higher is the down payment, the easier is the to qualify to the loan.
With a low credit score for the car that you like to buy, prepare to show the following documentation:
- Recent Paystubs
Your recent pay stubs are you most simple earning proof and the first one you can expect to be asked for by an automobile lender. If you are a W-2 worker, your employer will be able to give you some recent pay stubs.
- Tax Returns
Your tax return document can be helpful too. You can use your tax return as an independent contractor or freelancer. The same will be if you are an owner of your own business and you pay yourself.
You may need to show the car company a copy of your Schedule C business expenses. Tax return form specific to the lender for assessment.
- More Documentation
You can present more income proofs if you have other sources of income, and get a more significant amount of loan.
Example of income that is not coming form you work or business:
Learn more on pay stubs, visit here
loan for house or apartment
Thinking of purchasing a place to live? Need a loan for this expansive purchase? You will need you lastly pay stubs to convince your lender that you are qualified for the mortgage. You can learn more about applying for a mortgage.
Steps to get your Home Loan approved
Here are a few tips to help you get the best position for your mortgage approval.
- Save financial records and organize it in order
If you are a gig economy worker or in another kind of self-employment, you should keep the financial records in order. You will have to deal with tax authorities every year when it is the time for tax return. You will find it much easier to be qualified for a loan when you made enough money to pay the cash down payment, and you will be asking for a mortgage to pay for the next 20 years. Your credit score is not enough; you need to show a study income and large enough for the amount of loan you wish to have.
Using your pay stubs can effectively help you manage your yearly credit report.
- Arrange your employment and income information
Before you fill the application for a home loan, look for the documentation that will support your past and current financial status and your future employment and expected earnings. Lenders and mortgage brokers are going to ask you for this proofs. You better have it already in your hands, it will shorten the time to get the most desired “APPROVED” on your loan application.
What Your Pay Stubs Documents or Forms Should Show
Preparing your application for a home loan? First, your pay stubs of the last few months. The pay stub shows how much are your earnings and what taxes you had paid, including Federal Income taxes, and Social Security, and Medicare tax deduction. Also, health insurance payments
Why Do Banks Need to See Your Pay Stub?
The bank will do the same as any lender, looking for substantial proof of earnings. You should have the pay stubs for the last year in a folder. The bank will have the interest to see your stability as n employee. Granting loan requests,
What Kind of Proof of Income Is required For Getting a Loan
- Bank Institutions
Some lender will accept bank statements as proof of income. However, some organizations may not consider your bank statement as sufficient proof. A print out of your bank account financial movements can be of help.
- Tax Returns
Most of the lenders accept tax returns as proof of income. You can present one two or three-year tax returns. The lenders can get a good idea of your earnings by reading your reported gross income. You may be requested for an official tax transcript from the IRS as absolute proof of income. Tax documents are helpful for independent contractors and gig economy workers who receive income from multiple sources or do not receive pay stubs.
- Government Agencies paychecks
If you have income that comes from the government directly to your bank account, you can use the tax documents, benefits verification letter or the pay stubs that the government organization sends you by mail. –**–
- How we make a Paystubs
If your income is received via a direct deposit that usually generates pay stubs, ask your employer to mail or hand to you at the office. You may have your pay stub on the employer website that you can download when you need them. If you can not get your pay stub online ask the payroll department to hand you the pay stubs for the period that you need them.
Rental for a living place
Landlord’s important part of tenant screening is making sure the prospective tenant has enough income for paying the rent as long as the contract exists. If you are the landlord, you want to make sure the tenant has a stable source of income, and it is from a legal occupation.
There are three parts to the verifying income and employment process.
1. Asking for a Paystubs and W2s, or Form 4506 From IRS, and a Bank
To start the first part of the verifying of a prospective tenant’s is to request from the prospective tenant appropriate documentation.
For Prospective Tenants That are having an Employer:
- Pay stubs
Puy stubs are the most simple of the requests. Ask for two or three last months pay stubs. The pay stubs can help you to calculate the monthly and yearly income so that you will have an idea on the tenant’s paying capacity. Paystub will show you both the gross and net income of your candidate tenant. W2s
Ask for duplicates of the applicants W2 form. That will show you much income was declared for the last tax year.
Reading the W2 will allow you to learn what was the prospective tenant last year’s income and the capacity of commitment the prospect tenant can assume.
For Prospective Tenants Who Are Self-Employed:
- Bank Statements
Self-employed people are a different story, they may have made much money, but it may have woned and have not tax return the make a clear view of the income level. There are no pay stubs from the employer. You better ask for the bank statements to see how much money they have done. A report from two or three months back will be enough.
- File Form 4506 With the IRS
Another way to verify the ability to pay the rent is by asking the prospective tenant to submit the Form 4506 to the IRS witch is a request to receive a copy of the tenant’s federal tax records. There one issue with this option; it takes 60 days until you can have it. It will be to much time to have the property with not collecting any rent.
A faster solution can be to for a file form 4506-T that is the prospective tenant’s tax returns. It will take only one business day and will show you clearly what is the income of the possible tenant.
2. Call The Employer and Ask for an Employment Verification
For those prospective tenants that are employees on a payroll that get paid every week, two weeks o a month. You can check their pay stubs and request an employment verification. You can contact the employer’s HR office and get a confirmation about the employment of your prospective tenant
3. Running a Credit Check
You could meet a person that make enough many to pay the rent, but a credit check on this prospective tenant will Show you that this person is a “bad payer” that a past of failing the obligation to pay on time in other cases. A credit report can show you also who has run a credit check on the individual. You can call these people and learn if there were problems with this person.
Are you thinking of a fake paystub? STOP!
A fake pay stub can be used negatively, scamming insurance company, government, or cheating a lender. The use of a false document is considered a crime under US law.
Dealing with fake pay stubs will make you harvest bitter fruits. The phony solution will cost you real money and real headaches. You can lose your right name and credit in a way that no paystub will help you get any financing. Lawyers, fines, and even jail can be costly and painful, and it does not worse it.
Why Employers Make Fake Pay Stubs
There are reasons why employers can make fake paystub. Tax evasion by fake increasing the costs, or do not pay ahead to the IRS or Social Security the withholding of payroll tax. If you suspect a situation like this with your employer, get yourself an employment lawyer. Some lawyers will give you pro-bono advice.
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Disclaimer: John Wolf and paystubmakr.com are making a total effort to offer accurate, competent, ethical HR management, employer, and workplace advice. We do not use the words of an attorney and the content on the site is not given as legal advice. The website has readers from all US states which all have different laws on these topics. The reader should look for legal advice before taking any action. The information presented on this website is offered as a general guide only.