What is a pay stub?

Pay stubs are official documents that show an employee’s pay. 

They help organize the wages an employee has earned for the pay term and year to date payroll. It also features deductions, and the total take home income a worker receives. 

Pay stubs are given to the employee in either printed and digital form (or both) , but this depends on local regulations. Employers also keep a copy of the pay stub.

Information on a pay stub:

There is a lot of key information that you will find on a pay stub. Information you can expect to see on a pay stub include:

  • Employee name.
  • Date and pay period.
  • Hours worked.
  • Gross pay. 
  • Deductions. 
  • Net pay. 
  • Direct deposit information.

Let’s discuss some of these in a bit more in detail:

Gross Pay:

Gross pay is the sum that employees are entitled to get before any deductions are made.

If the employee is being paid hourly, you can multiply the figure by hours worked during the pay cycle to get gross pay.

If the employee is being paid an annual sum, you can divide it by the number of payments that are to be made during the year.


Deductions are expenses that are subtracted from gross pay. Employees do not get to take their gross pay home (it’s sad but it’s true). Take home income is classified as net pay, but more on that later.

Deductions include taxes, benefits and contributions. These also include subtractables that are incurred on a year to date basis.

Using local tax guides is a great place to start with. It is always better to educate yourself, especially if you are working on your own terms, on taxes even if you are having them done by a professional. 

Net Pay:

Net pay is the amount that you are left with after all deductions like taxes, contributions, and other deductibles are subtracted. 

It is the amount that is written on the paycheck or direct deposited to an employee’s account.

As pay stub compartmentalizes finances for a fixed time, you can easily make sure that things are accurate. If there is any doubt, you can simply refer to the pay stub and solve things.

Here is how you can get pay stubs as a self-employed worker:

  • The hard way. (Scared of spreadsheets? Skip this!)

Spreadsheets are a great way to keep your expenses in check and to create a rudimentary pay stub.

Working on a project basis? Make pay stubs by the project.

If you have a different arrangement, you can make pay stubs incrementally. 

You can use Microsoft Excel or Google Sheets to start off with. Search for pay stub templates and you should be starting at a good place.

  • The easy way.

If you are working as a self employed person these days, then you are already using technology and online means on a regular basis.

Why not use technology to get pay stubs?

All you need to do is to make sure that you enter your correct financial details including profits, income, taxes, deductibles, etc. and you will have a pay stub ready for you.

Please go through the terms and conditions when using any online tool. Doing your due diligence beforehand will save you from harm that is financial in nature or otherwise.

Why are pay stubs important?

Long story short, pay stubs are used as official records. 

These help employees understand their total compensation and any deductions that might have been made.

For employers, pay stubs help avoid any potential disputes that an employee might have in terms of their pay. By maintaining pay stubs, employers can easily address any issues that an employee might have. 

When are pay stubs used?

As discussed earlier, pay stubs are the go to documents that an employee will use to understand his pay and deductions. 

If there is a financial miscommunication, the employee and employer can settle it using the pay stubs that both parties have.

As a self employed worker, you can use your self generated pay stub as a means to show proof of your income. 

You will also need to refer to your pay stubs when you are filing your taxes. As pay stubs have detailed information, they will be much easier to use than bank statements or checks.

Another use case for pay stubs is to evaluate a person’s finances when applying for a loan or a mortgage. They also help when you apply for a credit card.


For self employed workers, having a pay stub is an easy means of showing their proof of income. 

As they are not working for someone, self employed workers will need to generate these pay stubs themselves.

Pay stubs contain information like gross pay, deductions and net pay. 

Understanding the information present on your pay stub is necessary as you are like a business owner. Several financial issues can be prevented if you effectively analyze this information.

Get an easy way to prove your income as a self employed worker using pay stubs and continue your path of freedom and fulfilling work. Check out employee benefits packages, if you want to know about it.

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