Are you a member of the self-employed army? According to Forbes statistics, 30 percent of Americans have been self-employed during some point of time and 14 percent of these people reveal that being an independent contractor is their primary occupation.
While being self-employed gives you a lot of freedom, it also results in various responsibilities you’ll have to address on your own.
Self-employment pay stub generation is one such administrative task you will need to handle when you don’t have a boss and you’re not somebody’s worker/employee.
There are a few important things you need to understand about self-employment pay stubs and payroll forms, especially if you want to ensure legal compliance.
Do You Need to Make a Paystub for Self-Employed Professionals
The IRS Tax Center provides extensive information for self-employed professionals who want to meet all taxation and payroll requirements. Do go through this guide in order to understand the essentials.
Maintaining meticulous records about your profit-generating activities and revenue is a must if you’re an independent contractor or another type of self-employed professional. When you’re somebody’s employee, the bookkeeping and HR departments handle this side of doing business. When you’re your own employee, everything falls on your shoulders.
Usually, paystubs are issued alongside paychecks and financial forms for each pay period. So, the short answer to the question posed in the title is yes, you do need to generate pay stubs as a self-employed professional.
When you have a well-organized paycheck stub archive, you’ll find it much easier to handle payroll documentation and complete taxation filings. Even if there isn’t a legal requirement in your state pertaining to the issuing of pay stubs, that’s still a good business practice you can embrace.
Paystub Generation Basics
Check stubs for self-employed professionals are fairly easy to generate if you follow a couple of simple steps. Here are the biggest essentials you will have to go through:
- Select the right self-employed pay stubs generator. Such an online platform will give you opportunities to customize the documents and automate some of the calculations. There are free of charge paystub generators you can test out immediately. Paid products usually have a demo version that allows tests, as well.
- Customize your templates (or pick an existing one) that gives you all the fields and the personalization options needed for document creation.
- Make sure you have all of the important information you’ll need to fill in the paystub:
- Payroll cycle information
- Wages or income
- Tax withholdings and other deductions
- Benefits withholdings (for example – the money you take out of the income for insurance premiums)
- Calculate your net pay.
- Create workflows and if possible, set formulas that will allow for automatic calculations in the future.
- If necessary, print out the self-employed pay stub you have just generated. Otherwise, maintain a digital archive that contains all of the information for the current fiscal year.
Reasons Why a Paystub Generator Is a Wonderful Choice for Self-Employed Professionals
If you use spreadsheet creation software, you may think that it’s sufficient for paycheck stub creation. Self-employment pay stubs, however, are much easier to generate with the right specialized tool.
Here are the top five reasons why getting a paystub generator makes sense.
You Don’t Have to Learn How to Make Self-Employed Pay Stubs
With the right generator, you’ll quickly forget about learning paystub generation essentials.
The platform gives you access to all of the fields and the automatic calculation options built within its software. You’ll simply need to enter the required details to ensure accuracy. Once the paystub is generated, give it a thorough run-through to make sure all fields are filled in correctly. That’s everything you’ll need to involve yourself in.
For those who have no intimate knowledge of payroll documentation or taxes, paystub generation can be a real nightmare. There’s going to be a learning curve and a lot of time dedicated to making calculations and ensuring the correctness of every single digit.
A payroll generator saves you time and gives you excellent results every single time. When pay stub generation is simplified, you can dedicate valuable time to other aspects of running your business.
Reduced Risk of Errors
Let’s face it – unless you’re an experienced accountant, you’ll probably make mistakes when generating paystubs manually.
That’s why you need a pay stub generator for self-employed professionals.
As already mentioned, many of the calculations will be automated. This feature reduces the risk of calculation errors exponentially. You don’t have to worry about submitting wrong information to the IRS and getting in trouble.
The fields featured in a typical paystub can vary from one industry to another. There may also be some specifics based on location or the manner in which you’re getting paid (hourly or fixed payments, for example).
With a paystub generator for self-employed professionals, you’ll enjoy unparalleled customization potential.
Many generators allow you to customize existing templates or to even create your own. You can also select the manner in which specific fields are going to be filled out or how the calculations will be made. In other words, you’re 100 percent in control of the process.
Ideal for Beginners
If you’re just getting started on your freelance journey, you probably feel a lot of pressure to perform well.
Having administrative and taxation burden on top of other responsibilities can easily lead to burnout.
Paystub generators for self-employed professionals are very easy to use, even if you’re a rookie. Many offer drag and drop functionalities or another user-friendly approach to data entry. Many of the details can be saved so that you’ll be free from having to enter stuff manually each time.
A Paycheck Stub Generator Sets You on the Path to Success
While this may sound like a bit of an exaggeration, the statement isn’t far from the truth.
Bookkeeping and financial document maintenance is often a nightmare for self-employed professionals. And those who decide to outsource the process need to plan the additional expenditure linked to record keeping,
With the right software product, pay stub generation becomes a simple task (even if there are highly specific requirements in the respective field). Knowing your records are impeccable gives you peace of mind and the chance to focus on growing your business. If you’re not employing such a platform yet, consider making the switch. You’ll notice the difference right off the bat.