As an employee, you might come across many situations where you’ll be required to provide proof of income. After all, you’re employed, right?
Producing a copy of your pay stub might be the easiest way to prove your income. But things will not always go as planned, considering not all companies provide pay stubs to their employees. And there is no federal law that requires them to do so.
And even if your company provides pay stubs, chances are you’ve buried them deep in a heap of paperwork that’s next in line on the shredder. That said, most people don’t realize the importance of keeping pay stubs safe.
But these little confidential papers can save the day, especially when you need proof of income documents for verification purposes. This article will discuss five situations where you may need pay stubs to prove your income.
1. Accident Compensation
If you were involved in an accident and cannot continue working due to the injury, then your pay stubs may come in handy if you intend to file for compensation for loss of earnings.
In this case, your pay stubs (also known as check stubs) will prove what you have earned and what you’ll be losing in the future due to the injury.
So, when applying for an accident compensation claim, you have to be prepared to prove the loss of earnings. And this is where a check stub maker comes in handy to save the day. It allows you to create professionally-looking pay stubs (with all your earnings and deductions) that you can download, print, and share right away.
When you’ve found your perfect townhouse or apartment, you’ll need to negotiate terms and rent, among other things, with the landlord.
The landlord will, in most cases, ask for proof of income to make sure you can afford to live there. This allows them to understand your income situation and deduce how reliable and consistent you’ll be with your payments.
A collection of pay stubs can prove your earnings over a long period, giving the landlord assurance that you have a steady income. But if you began your job a few weeks before applying, the landlord might refuse to rent the house to you.
3. Securing Loans
When applying for loans—be it a personal loan or auto loan—you’ll be required to provide proof of income documents.
Depending on the institution, you might be asked to provide a bank statement, pay stubs, or both. This is done to ensure consistency in the income you claim to earn. It also gives the lending institution assurance that you’ll be able to repay the loan within the stipulated time.
4. Refinancing Mortgage
If you’re looking into refinancing your mortgage to save money, the lender will ask for pay stubs to verify that you’re employed.
Among other things, the lender must ensure they are approving a mortgage to someone who has the potential to repay on time. Having pay stubs can provide the needed proof of income and speed up the loan application process.
Proof of income is one of the top reasons for keeping pay stubs.
In most cases, when a significant amount of money is involved, the business you’re dealing with will want proof that you have the money to cover the expenses. And pay stubs are the best way to prove your income since they are also easier to create online.
Besides the proof of income, pay stubs make filing your taxes easier. So, don’t trash them, as you never know when they will come in handy.