Proof Of Income Documents - 6 Instances You'll Need A Pay Stub


Did you know that federal law doesn't require an employer to give his or her employee a pay stub? It's no wonder that sometimes when people are asked for a pay stub they have nothing to show and find themselves in a bind. There are several cases where you need proof of income documents for verification. Keep reading to learn six instances where pay stubs are required.

Proof Of Income Documents - 6 Instances You'll Need A Pay Stub

A pay stub, for those that do not know, is a piece of paper that can prove someone's income. Sometimes one finds oneself in need of sharing proof of income documents and is left trying to figure out what to do. Some people might have never received any and others might have thrown them away not thinking they were important.
Pay stubs help employees make sure they're getting paid correctly. Employees can verify what their gross wages were, the withholdings they had, taxes withheld, deductions, and contributions made.

1. Personal Loan

If you find yourself in need of taking out a personal loan, one of the documents required is proof of income. This is to make sure that you are able to repay the loan you take out. Every lender is different. Some might ask for the most recent pay stub while others might ask for a month or two worth of pay stubs.

2. Auto Loans

Applying for an auto loan is similar to taking out a personal loan. They need to make sure you can pay the loan back. They will require proof of income usually in the form of pay stubs. Depending on how much you'll be financing for the car, they might require you to make a certain amount per year or month and will need to see proof that you make what you proclaim.

3. Taxes

When you file your taxes at the beginning of the year, your pay stubs can make filing easier. Your last pay stub of the year will show how much income you received and how much you paid in taxes. It will also have proof that you had health benefits. In case there is a discrepancy with a W-2 your pay stub will serve as proof for tax purposes.

4. Renting

If you're in need of renting a new home or an apartment, the landlord or apartment complex will sometimes ask for proof of income to make sure that you can afford to live there. Some apartment complexes or rental agencies will require several weeks worth of pay stubs. They also want to see the total amount you've made so far to give them an idea of how long you've been working for that company.
They might refuse to rent to someone who began a job a few weeks before applying, as this does not show a steady flow of income. The longer your employment with the same company the easier it is to get approved when you provide your pay stubs.

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5. Refinance A Mortgage

If you want to refinance your mortgage to save some money, the lender will require you to show your pay stubs as proof that you are employed. A lender's job is to make sure that when they approve a loan, the person applying has a steady income with the ability to pay back. Having pay stubs will make this easy to prove and make the loan application wait time shorter.

6. Accident Compensation

If you were involved in an accident that won't allow you to work, then your pay stubs will come in handy if you have to file for compensation for loss of earnings. Your pay stub, in this case, will serve as proof of what you've earned and proof of what you would've been making in the future. When applying and demanding any type of compensation you have to be prepared to show proof of what you're claiming you're missing out. A pay stub serves as evidence of your earnings.

How Long Should I Keep My Pay Stubs?

A good rule of thumb is to verify your payment as soon as you get your pay stub. Keeping a couple of months worth of pay stubs is generally enough for any type of income verification. If it's the beginning of the year and you haven't done your taxes yet, then make sure you keep the last pay stub for the year in case there are any discrepancies with your W2 form.
If you're trying to minimize paper clutter you can scan them to be available and easily accessible in a digital format ready to print if needed. If you decide to keep them in digital form make sure you have a backup in case something happens to the original file. Keeping them in a digital format means you can keep all of your pay stubs for the year without worrying that you have too many papers. This is one way to go digital. Make sure you shred your stubs after you're done scanning them.

File Those Pay Stubs

Now that you have learned six different instances you might need to provide proof of income documents, make sure you file those pay stubs somewhere safe. If you are that person that normally throws them out it's time to stop. You don't know when you'll find yourself in a situation where you will need your stub.
If you have been throwing them away and suddenly realize that you need a stub to verify your income, don't worry simply create your pay stub today!

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Proof Of Income Documents - 6 Instances You'll Need A Pay Stub
James Wilson

After graduating from McCombs School of Business in Texas, James joined ThePayStubs as a CPA, in order to make sure the numbers we provide our clients... Read More

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