The U.S. Department of Labor requires employers to keep records of how much they pay their workers. Many employees assume that this makes their paystub important to their employer, but not to them. This isn’t true.
Keep reading now to learn why your payment stub is just as important to you as it is to your employer.
1. Pay Stubs Are Legal Proof of Employment
If you want to apply for a loan or a mortgage or to rent an apartment, you’ll need to be able to prove that you are employed. A pay stub is accepted proof of employment for almost any application process. Pay stubs can also serve as proof of identity and address when you are applying for a license, non-driver ID, or other key documents.
2. Payment Stubs Are Legal Proof of Income and Withholdings
As an employed adult, you may be surprised by the number and variety of situations in which you need to prove your income. Payment stubs are the fastest and easiest way to do that. Your paystub can also serve as proof that taxes and other mandatory payments are being appropriately withheld from your paycheck should an issue arise.
The clear information that pay stubs provide about gross income vs. net income can also empower workers to take control of their finances. Workers who don’t have a clear understanding of what they can expect to take home every week can become slaves to money. Getting familiar with their pay stubs and pay can be the first step in making positive, healthy changes.
3. Check Stubs Help Workers Verify and Correct Their Pay
Everyone makes mistakes. Even employers. Your pay stub helps you catch and correct those errors when they occur, ensuring that you:
- Get the pay you deserve
- Don’t get overpaid then hit with unexpected repayment terms later on
- Receive raises and other pay adjustments on time
4. Payment Stubs Allow Workers to Track Non-Pay Benefits
If you receive paid time off (PTO) and other non-pay benefits, your payment stub will reflect them. This enables you to:
- Verify that you are being properly credited for these benefits
- Clearly see what benefits are available to you to spend
- Take advantage of these benefits before they expire, where applicable
5. Pay Stubs Help Businesses, Too
Legally, employers have to be able to show who they paid, when, in what amount, and for what work. Pay stubs capture all of that information in a neat, easy-to-reference form.
Can you create a pay stub for free if your employer doesn’t provide one? Absolutely! Many workers whose employers do not provide them with pay stubs regularly create their own online.
With the clear importance of a pay stub in performing basic tasks of adult life, it isn’t hard to see why this is an attractive option.
Understanding the value of your payment stub is empowering. It is only one step on the path to becoming more fiscally savvy, however. Check out our money and finance section for more great tips on how to take control of fo your financial future today.