We use our phones to transfer money and deposit checks. Any company that doesn't do direct deposit is considered antiquated. Most people can't remember the last time they went to a brick-and-mortar bank.
And yet, we are still periodically asked for paper proof of employment.
In this digital age, we have not yet gone completely paper-free. Holding onto a hard copy of your pay stubs may pay off.
Check out these 5 situations in which having your pay stub can save you time and energy.
When Filing Taxes
Taxes are grueling, especially if you are a freelance or contract employee. Self-employment provides its own tax headaches. Whether you're dealing with your simple W-2 or you have much more complicated taxes, keeping your pay stubs provides easy-to-decipher proof of income.
It also provides detailed evidence of the amount of tax that was withheld from each check for Social Security, Medicare, and employer-sponsored retirement funds.
When Filling Out a Rental Application
When renting a home or apartment, you will be asked to provide proof of income. This allows the rental company to assess whether you qualify for the rental.
In many cases, there is a qualifying amount of money you have to make in order to be able to rent the space.
For example, for some apartments, you need to prove a combined monthly income that is equal to twice the rent amount.
If you don't have pay stubs to provide, you can provide your bank statement. This can get messy because it gives the rental company more information about your finances than they need, or more than you want them to have.
Your pay stub can also be used to verify your current address.
When You Need Proof of Employment and Income
Like with a rental application, any application for a loan or other financing requires you to provide proof of employment and income.
This allows the loan officer to determine your ability to repay the debt.
The paystubs can prove you have a steady income without revealing all of your financial secrets via bank statements. Does the lender really need to know that you buy a daily coffee?
Pay stubs also provide the added benefit of documenting your hours worked and overtime hours worked. This can help you properly estimate your annual income if you are an hourly employee.
When Filing for Compensation
There may be a time when an accident or other unfortunate situation puts you out of work. If this happens, you may need to file for loss of earning compensation or worker's comp.
The process of filing can be daunting but having hard copies of your pay stubs can make it a little easier.
They provide evidence of what you typically make in a month and how much you anticipate in lost income as a result of an injury. Focus on your health, not the stress of filing.
When Checking for Discrepancies
Direct deposit is simple and easy. But when was the last time you looked at the associated paystub to make sure it matches with what you should be getting paid?
Your employer is just human, and humans make mistakes. If you don't take a look at your pay stubs every pay period, it may be months before you realize they aren't paying you the right hourly wage, or they are withholding too much for taxes.
So Don't Shred Just Yet
Here are five situations in which proof of employment can make your life a whole lot easier. Whether you're looking to rent an apartment or file your taxes, pay stubs can relieve some of your financial headaches.
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