Tax fraud is costing the US government about $450 billion yearly. The IRS is hot on its feet, looking for anyone contributing to that amount. Thus, it has become more important to have a neat record of your financial documents. That is why PayStubCreator helps people manage their documents.
Most salaried people have nothing to worry about since most companies keep their employee’s files. Despite that, it’s important to have your proof of income documents.
Some landlords or financial institutions may ask for them. Yet, some freelancers and small business owners can find it hard to provide these financial documents. It’s not that they aren’t filing taxes, but they lack income records.
If you aren’t aware of this situation, you may fail to distinguish some of these financial documents. Join us to discuss the major differences between check stubs and pay stubs.
Check Stub vs. Pay Stub
A pay stub is a financial document that outlines an employee’s gross wages and tax deductions after a pay period. In most cases, it’s monthly or weekly.
To comply with federal wage laws, you must issue your employees pay stubs. Pay stubs make filing taxes a breeze for both parties. Besides, it will be easy for you to rectify any payroll errors.
When you receive a check, a financial document comes with it. That document is known as the check stub.
The check stub has key information about the check. So you can produce it as proof of income.
Sources and Recipients
Pay stubs come from an employer. They are receipts that an employer paid the employee. But you can also make pay stubs online. There are tools available online that help you create your own pay stubs and are 100% authentic.
In most cases, the recipient is a salaried person. Thus, employees receive pay stubs at regular intervals.
Check stubs are more common among freelancers and people working under contracts. Check stubs come in handy for non-salaried people because it is harder for them to prove their income.
Note that you can provide several check stubs to verify pay for a single period. Since some checks can come as gifts, not all check stubs can fall under pay stubs.
Details of the Financial Documents
Check stubs include details regarding a single check. They outline the amount paid and the invoice number.
As opposed to the pay stub, they don’t provide a history of payments. However, they make it easy to match the check with its invoice.
A pay stub includes more details about both parties. You’ll find the employer’s name and address on a pay stub, gross wages, date of pay, tax deductions, and net pay.
It’s wise to outsource a professional to help you generate a pay stub for your permanent employees. Whenever you hire under contract for extra services, create a check stub instead.
Proof of Income Documents
There is a clear difference between check stubs vs. pay stubs. You’ll have an easier time filing taxes if you have a neat record of the proof of income documents.
Outsource professionals to help you draft the financial documents! This way, you can focus on other management duties.
