What Are the Benefits of a Payroll Check Stub?
The Fair Labor Standards Act (FLSA) sets the federal record-keeping laws that require employers to maintain correct records of employee work hours and wages paid. The FLSA does not require employers to give employees a payroll check stub. Many states have this requirement, since a check stub can benefit the employee in many ways.
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Pay Confirmation
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If state law requires the employer to give employees a payroll check stub, it generally says what should be included on the stub. The employer is often required to include the employee's gross wages, deductions paid and his net or take-home pay. Most employers include the employee's work hours and the respective pay rate as well. It can be difficult for the employee to know exactly how he was paid without a breakdown of his earnings and deductions. A payroll check stub allows him to confirm that the appropriate amount of statutory and voluntary deductions were made from his paycheck, and that he was paid at the correct pay rate for the appropriate amount of hours.
Tax Filing Option
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Employers are required by law to deliver or postmark employee W-2s by January 31 of each year. The Internal Revenue Service requires the employee to use her W-2 to file her tax return by April 15. If she does not receive her W-2 on time, the IRS still requires that she file her tax return by the due date. Most employers include the employee's year-to-date earnings and deductions on the payroll check stub. The employee needs this information to complete her tax return.
If she tried to obtain her W-2 unsuccessfully, she can file her tax return with her last pay stub for the year.
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Proof of Income
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In certain situations, such as renting an apartment, buying a home or applying for a personal loan, the employee must show proof of income. Lenders and landlords require this information to confirm employment and to decide whether the employee meets the qualification standards. A payroll check stub serves as an acceptable proof of income in such situations.
Considerations
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If the state does not require the employer to give employees a paycheck stub, many employers still do so as a convenience to the employees. Employees who do not receive a check stub with their paychecks can try to speak with their employer and explain the benefits of check stubs for employees.
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References
Resources
- Photo Credit check book image by Rob Hill from Fotolia.com
