Pay stubs are becoming quite important these days both for employees and employers. As a result of which, many employers are providing electronic pay stubs to employees rather than physical paper copies. So, what can a pay stub be used for? Here are a few reasons:
- When filing taxes: Taxes can be grueling and having paystubs make it less stressful in computing your W-2s. The pay stub gives you an overview of the amount earned for a period. Also, they show different types of deductions and contributions taken out of your paycheck. All of which can be helpful for your year-end tax filings.
- Rentals & loans: Paystubs can come very handy if you want to provide a proof of address to your landlord. Or, you need to show proof of your earnings for applying for credit, maybe like a loan.
- For a work reference: Besides using paystubs as a proof of income and employment, they can be helpful for a work reference too, as to the new employer, it can give an idea of the number of hours worked, overtime you did if any, and the length of employment.
Thus, pay stubs are more likely to be a resume of your income that details the earnings for the pay period and year-to-date total. It is these numbers that make the evidence that you are regularly working, and if it's not there, then the lender would reject your loan application.
So, when pay stubs are of such help, do not discard them immediately. Keep them for at least a year.