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Paycheck

Form 1099-NEC or nonemployee compensation 1099 makes a comeback in 2020 after a 38-year hiatus.
Employers and business owners used Form 1099-MISC for the past few decades to report nonemployee compensation. This time around, they could now welcome the revived and revamped 1099-NEC form.
&nbsp;
This article gives you knowledge about the IRS requirements for non-employee compensation with your business.
<h2>What is 1099-NEC?</h2>
For starters, 1099 forms are federal income tax forms for businesses used to report financial transactions over the course of a tax year. Meanwhile, NEC stands for nonemployee compensation. This means Form 1099-NEC allows employers to report payments made to nonemployees or independent contractors.
&nbsp;
Specifically, you use the form to report someone's earnings that do not include wages, salary, or tips (which you report on a Form W-2 meant for employees). The 1099 forms were allocated for independent contractors.
&nbsp;
Non-employee compensation 1099 typically reports fees, commissions, prizes, and awards to nonemployees $600 or more. Employers need to file 1099-NEC with the Internal Revenue Service (IRS) and send copies to all recipients by January 31, generally.
&nbsp;
Form 1099-NEC also reports any federal income tax withheld under the backup withholding rules.
<h2>Is This A New Form?</h2>
Answering the question "Is the nonemployee compensation 1099 form a new form?" requires us to take a little history lesson. The 1099-NEC dates back to 1982, when it was last used. This makes it an old form, but the IRS brought it back to use in 2020 to simplify payment reports to nonemployees.
&nbsp;
Therefore, the answer to the question is both a yes and a no. After the IRS discontinued 1099-NEC in 1982, Form 1099-MISC became the main form where employers need to report non-employee compensations. However, due to the tax law Protecting Americans from Tax Hikes <a href="https://www.finance.senate.gov/imo/media/doc/Summary%20of%20the%20Protecting%20Americans%20from%20Tax%20Hikes%20PATH%20Act%20of%202015.pdf" target="_blank" rel="noopener">(PATH) Act </a>that aims to protect taxpayers against fraud, the 1099-MISC became an ineffective document.
&nbsp;
The PATH Act made different sections of the form due at different times, making it a troublesome means of reporting. Box 7 on the miscellaneous form became due by January 31, while the rest of the form became due by February 28 for paper filing and March 31 for electronics filing.
&nbsp;
In the revived 1099-NEC form, the amount reported in Box 7 (nonemployee compensation) would go in Box 1. Bringing back the old, discontinued nonemployee compensation 1099 became the best solution to create a better process. This eliminated errors when submitting two 1099-MISC forms at different times. Employers would only have to use one form or the other.
&nbsp;
<img src="https://www.realcheckstubs.com/media/form 1099-nec paystub creator.png" alt="Is the nonemployee compensation 1099 form a new form" width="958" height="426" />
<h2>Which Form Should You Select? / Do I Need To File A 1099-NEC?</h2>
If you pay a nonemployee, such as independent contractor, on behalf of their business, at least $600 for services, goods, or even legal fees, then you would need to file a 1099-NEC. This amount could include fees, commissions, bonuses, and even benefits.
&nbsp;
You should file a nonemployee compensation 1099 form for each individual paid $600 or more during the year if:
&nbsp;
<ul>
<li>- An employer pays an individual not in their employ, such as an independent contractor, for services performed. This could include materials utilized to perform the services or payments for parts; or</li>
<li>- A business owner purchases fish or other aquatic life using cash payments from anyone engaged in the business or trade of catching fish; or</li>
<li>- An individual makes a payment to an attorney for their legal services in the course of a trade or business.</li>
</ul>
Typically, you would need to report a payment as nonemployee compensation if it meets all the following conditions:
&nbsp;
<ul>
<li>- You make a payment to an individual not employed in your company or business.</li>
<li>- The payment covers services in the course of your trade or business.</li>
<li>- You make the payment to an individual, partnership, estate, or corporation.</li>
<li>- The payee receives payment of at least $600 during the year.</li>
</ul>
&nbsp;
If you withheld any federal income tax (regardless of the total amount paid out) as part of the backup withholding rules, or make a payment of at least $10 in royalties, then you would still need to file a 1099-NEC.
<h2>Who Requires a Form 1099-NEC?</h2>
If a business owner paid an independent contractor $600 or more during a tax year, they need to file Form 1099-NEC. However, a nonemployee compensation 1099 form would not be required if the contractor were registered as an S corporation or C corporation, which can be determined on the contractor's Form W-9.
&nbsp;
You do not need to file a 1099-NEC for their employees. Employees are required to file a Form W-2 to report their wages, tips, and other compensation earned during a tax year. You could find yourself with significant penalties if you misclassify employees as contractors.
&nbsp;
If a business owner pays an LLC or an individual $600 or more during the tax year in rent, legal settlements, awards, or prize winnings, they need to file a 1099-MISC.
<h2>Where Do You Send Form 1099-NEC</h2>
When filing Form 1099-NEC, you should be aware of where to file them. Like the Form 1099-MISC, employers need to file multiple copies of the nonemployee compensation 1099.
&nbsp;
Each Form 1099-NEC requires two copies, Copy A and Copy B, which need to be filled out with the same information. If an employer hires an independent contractor and pays $600 or more in a year, they must report all payments in that year.
&nbsp;
Copy A would go to the IRS, Copy 1 to the state tax department (if applicable), Copy B and Copy 2 goes to the contractor, while Copy C should be stored for record-keeping purposes. The independent contractor receiving Copy B does not have the responsibility to file Form 1099-NEC.&nbsp;
&nbsp;
You could also file Form 1099-NEC electronically or through mail to the IRS, depending on which state your business mainly operates.
&nbsp;
In some places, employers are also required to file nonemployee compensation 1099 with the state. Alaska, Florida, Illinois, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington, and Wyoming do not require employers to submit 1099 forms.
<h2>What Do You Include on Form 1099-NEC?</h2>
Employers should request a filled-out Form W-9 from newly hired independent contractors to fill out Form 1099-NEC. When filling out Form 1099-NEC, you should include the following information.
&nbsp;
<ul>
<li>- Your name, address, and phone number</li>
<li>- Your TIN (Taxpayer Identification Number)</li>
<li>- Recipient's name, address, and TIN</li>
<li>- Total nonemployee compensation</li>
<li>- Federal and state income tax withheld (if applicable)</li>
</ul>
&nbsp;
Additionally, Form W-9 should include the contractors:
&nbsp;
<ul>
<li>- Legal name or business name if applicable</li>
<li>- A business entity (sole proprietor, partnership, corporation)</li>
<li>- Current address</li>
<li>- Taxpayer identification number (SSN, ITIN, or EIN)</li>
</ul>
&nbsp;
Nice to Know: <a href="https://www.realcheckstubs.com/blog/paystubs/where-to-find-fein-number-on-pay-stub">&nbsp;Find EIN Number on Pay Stub</a> and<a href="https://www.realcheckstubs.com/blog/paystubs/do-pay-stubs-have-ssn-a-definitive-guide">&nbsp;A Definitive Guide to SSN&nbsp;</a>
The responsibility of filing nonemployee compensation 1099 falls on the payer. Check bookkeeping records to confirm the total amount of payments made to each contractor over a tax year and finish filling out the form.
&nbsp;
There are seven unnumbered boxes on the left side of the 1099 form. These boxes require you to input information about you as the payer and recipient (the contractor you paid during the year). There are also seven numbered boxes on the right where you enter amounts.
&nbsp;
<ul>
<li>Box 1: Nonemployee Compensation &ndash; You need to report all payments you gave to a nonemployee during a year. An independent contractor uses the amount entered in Box 1 to file their income tax return.</li>
<li>Box 2: Direct Sales &ndash; Box 2 is simply a checkbox for if you made any direct sales of $5,000 or more of consumer products for resale, buy-sell, deposit-commission, or any other basis. If you did make a direct sale, put an "X" in the checkbox.</li>
<li>Box 3: (Empty) &ndash; According to the IRS, Box 3 is reserved for future use and is currently left empty.</li>
<li>Box 4: Withheld Federal Income Tax &ndash; If you withheld taxes from nonemployee compensations under backup withholding, you would need to fill out this box with the amount withheld.</li>
<li>Box 5: State Tax Withheld &ndash; If you withhold state income taxes from a contractor's payments, you need to report the amount in Box 5.</li>
<li>Box 6: State/Payer's State No. &ndash; Enter the abbreviated name of the state and the state identification number where you withheld the state tax.</li>
<li>Box 7: State Income &ndash; Enter the amount of the state income in Box 7 of the nonemployee compensation 1099.</li>
</ul>
&nbsp;
You do not need to fill out Boxes 5 to 7 on the copy you send to the IRS, as these boxes are for the recipient and state only.
&nbsp;
<img src="https://www.realcheckstubs.com/media/nonemployee compensation form real check stubs.jpeg" alt="seven unnumbered boxes on the left side of the 1099 form" width="960" height="640" />
<h2>When is the Form 1099-NEC Deadline?</h2>
Although the miscellaneous 1099 form or 1099-MISC is still in use, contractor payments made by employers in 2020 and the succeeding years would need to be reported on the Form 1099-NEC. Starting 2021, the new nonemployee compensation due date is on January 31. However, if it falls on a weekend, the due date moves to the next business day.
&nbsp;
If January 31 lands on a Saturday or Sunday, which means the new nonemployee compensation 1099 form moves to the following Monday on February 1 or 2.
&nbsp;
Meanwhile, 1099-MISC is still due on March 1 if filing by paper or March 31 if filed electronically. If these dates do not land on business days, their due dates also move to the next business day.
&nbsp;
If you need to ask for an extension, there is no guarantee that you would receive it. Employers are still expected to submit 1099-NEC following the deadline unless prevented by a natural disaster, a severe injury, or by death.
<h2>Conclusion</h2>
It is always good to study these kinds of forms for the benefit of your business.
&nbsp;
The confusion brought about by the 1099-MISC form prompted the IRS to revive and reintroduce the revamped Form 1099-NEC, also known as nonemployee compensation 1099. Although the miscellaneous form is still in use by businesses, independent contractor payments made by employers are now reported on Form 1099-NEC.
&nbsp;
Using the 1099-NEC allows business owners to report nonemployee compensation without the trouble of filing on different dates. The form makes it easier and less complicated to file. Take a few minutes to get to know Form 1099-NEC and its requirements so your business functions smoothly without fear of penalties.

For starters, 1099 forms are federal income tax forms for businesses used to report financial transactions over the course of a tax year. Meanwhile, NEC stands for nonemployee compensation. This means Form 1099-NEC allows employers to report payments made to nonemployees or independent contractors.

What is 1099-NEC?

If you pay a nonemployee, such as an independent contractor, on behalf of their business, at least $600 for services, goods, or even legal fees, then you would need to file a 1099-NEC. This amount could include fees, commissions, bonuses, and even benefits.

Which Form Should You Select? / Do I Need To File A 1099-NEC?

If a business owner paid an independent contractor $600 or more during a tax year, they need to file Form 1099-NEC. However, a nonemployee compensation 1099 form would not be required if the contractor were registered as an S corporation or C corporation, which can be determined on the contractor's Form W-9.

Who Requires a Form 1099-NEC?

The nonemployee compensation 1099 form or 1099-NEC allows employers to report payments amounting to $600 or more to nonemployees. Who needs to file?

Guide to Form 1099-NEC:  Nonemployee Compensation

What is Form 1099-NEC and Who Needs to File?

Finding the right and trustworthy real check stub maker is an essential element of processing or running payroll for your employees. For small businesses without a partner payroll processing company, you might find yourself doing payroll manually. This includes accurately calculating employee hours and pay, providing employee and employer identification numbers, and understanding federal and state laws.
&nbsp;
<a href="https://www.realcheckstubs.com/blog/paystubs/what-is-a-paystub-and-what-does-a-paystub-look-like" target="_blank" rel="noopener">Paycheck stubs provide crucial information to your employees</a>, allowing them to track their finances, such as contributions and taxes paid and gross and net income. These documents also help you keep payroll records.
&nbsp;
Generating paystubs could become laborious and time-consuming, especially when you employ many workers. Luckily, various online real check stub generators could help you throughout the whole process. As they are a necessary part of payroll, you need to develop a system that would quickly generate paystubs.
&nbsp;
Searching for a paystub generator on the internet would spit out many options, both free and paid versions. These online services offer excellent services that would benefit your business in dealing with administrative tasks. However, as great as that sounds, you should still make sure that their services could be trusted.
<h2>7 Safety Features to Look For in an Online Real Check Stubs Maker</h2>
A good check stub maker has qualities that guarantee a safe and worthwhile experience that helps businesses run a smooth payroll. Here are some features you need to consider before trusting an <a href="https://www.realcheckstubs.com/blog/paystubs/best-paystub-generator-2022" target="_blank" rel="noopener">online paystub generator</a>.
<h3>1. Secure Payment</h3>
One of the most sought features when looking for a trustworthy paystub generator is a secure payment channel. A quality service provider would ensure the safety of your payments by protecting your sensitive bank or card information. It would be best if you always looked for a trusted gateway when transferring funds online.
<h3>2. Secure Data Transmission</h3>
Using an online check stub maker means you would need to share personal employee and company information, such as wages and identification numbers. Look for a reliable generator that guarantees the data you share with their server would be encrypted. This eliminates the risk of any data breach that hackers could take advantage of. Check for data encryption that goes through Secure Sockets Layer/Transport Layer Security (SSL/TLS).
<h3>3. Data Security Against a Third Party</h3>
Make sure to always read the terms and conditions of the service provider thoroughly. Understanding how check stub generators collect and use the data you provide gives you an added layer of protection from unwanted actions. Third parties could use personal information for various commercial purposes, such as targeted advertisements. Confirm that if any data is gathered, it would only be used to customize and ease your service experience and not leak to other parties.
<h3>4. Customer Reviews&nbsp;</h3>
Going through both positive and even negative reviews could help you decide whether to trust a check stub generator. Reviews show the experiences of different people while using the on-site&rsquo;s services and features. Look for customer statements that examine the paystub maker&rsquo;s performance, service quality, overall security, and customer relations. <a href="https://www.realcheckstubs.com/reviews" target="_blank" rel="noopener">You can check customer reviews about the Real Check Stubs generator.</a>
<h3>5. Quality Customer Service</h3>
A promising sign of excellent customer service means that your queries are guaranteed to be answered and resolved within 24 hours of posting. This also comes hand-in-hand with security as hands-on service requires a service representative to help you if you have trouble using their platform or need to make corrections. Find out whether they could be reached via email or phone.
<h3>6. Transparency in Return and Refund Policy</h3>
There could be circumstances where a mistake could be made while entering information or ordering a check stub. You might also be dissatisfied with their service or have issues with the final printable paystubs wishing to discontinue. Look for a check stub generator that has accountability when it comes to returns and refunds when necessary. Some service providers offer 24-hour corrections or a 100 percent money-back guarantee.
<h3>7. Ask for a Trial Run</h3>
If possible, ask your prospect service provider if they can make a trial run of their services and the features of their check stub maker. This gives you an overview of how it functions and the safety elements built into it. You could list the pros and cons, and make a decision based on how well their platform runs.
<a href="https://www.realcheckstubs.com/blog/paystub-generator/are-paystub-generators-legal">Revealed: Are Paystub Generators Legal?&nbsp;</a>
<h3>Conclusion</h3>
There are plenty of <a href="https://www.realcheckstubs.com/generateStubs" target="_blank" rel="noopener">check stub makers </a>when you search online. However, how much could you trust them, and what qualities and features you need to look for to guarantee your business&rsquo;s security? A good check stub generator has qualities that guarantee a safe and worthwhile experience that helps businesses run a smooth payroll.
Ensure that the paystub maker you choose has a secure payment channel, can safely protect your data from any breaches, cannot be accessed by any third party, positive customer reviews, quality customer service, and a transparent return and refund policy.

One of the most sought features when looking for a trustworthy paystub generator is a secure payment channel. A quality service provider would ensure the safety of your payments by protecting your sensitive bank or card information. It would be best if you always looked for a trusted gateway when transferring funds online.

Does Online Real Check Stubs Maker Have Secure Payment?

Using an online check stub maker means you would need to share personal employee and company information, such as wages and identification numbers. Look for a reliable generator that guarantees the data you share with their server would be encrypted. This eliminates the risk of any data breach that hackers could take advantage of. Check for data encryption that goes through Secure Sockets Layer/Transport Layer Security (SSL/TLS).

What is The Data Policy of Online Real Check Stubs Maker?

Wondering if you can trust online real check stub maker? Find out the pros and cons of using these tools and ensure you're getting accurate pay stubs.

Can You Trust An Online Real Check Stubs Maker?

Can You Trust An Online Real Check Stubs Generator?

Setting up a sound payroll system benefitting both employers and employees is an essential step in starting any business or company. Determining how and when your employees would receive their payments for work done is a necessity to handle your own payroll. This means that it is essential for you to understand <a href="https://www.realcheckstubs.com/blog/paystubs/pay-stub-abbreviations-2022">basic paycheck terminology</a>.
&nbsp;
Read on to learn the difference between the terms pay cycle, payday, and pay period.
<h2>What Is a Pay Cycle?</h2>
Also known as a &ldquo;pay schedule,&rdquo; a pay cycle describes the frequency when an employer pays their employee for work rendered. It tells you how often payroll runs and the specific days your workers receive their salary. The pay cycle takes into account the day that you issue payment to the employee, known as payday, and the period an employee worked that reflects on their paystub, known as the pay period.
&nbsp;
By establishing a pay cycle, your business could create a calendar showing when employees could expect compensation for their work. It would also detail the time duration included in a particular payment.
&nbsp;
As an employer, you would assign pay cycles to positions to help control when employees in such positions are paid. You could also determine the schedule for processing payroll components, such as recurring benefits and earnings, when assigning a pay cycle to the payroll calculation.
&nbsp;
After choosing which pay cycle suits your organization, you could generate a pay period for each cycle. This includes default payment dates based on what information you provide. You could also modify these dates during the stretch of a pay period to handle exceptions, such as when a payment date lands on holiday.
&nbsp;
Pay cycles ensure that employees receive their payment for their work in a regular and predictable fashion. It also gives you information associated with taxes, insurances, and expenses that go hand in hand with deadlines.
<h2>Pay Cycle Types</h2>
As an employer, you have the freedom to set up your own pay cycles when otherwise not dictated by law. The following are different types of pay cycles you could consider.
<h3>- Daily&nbsp;</h3>
Daily paychecks issued at the close of each workday are among the least common type of pay cycle. They could become prohibitively expensive and time-consuming, especially for small businesses. It could be beneficial to less financially stable employees who may need to cover unexpected expenses without waiting for the entire pay period in other types.
&nbsp;
<ul>
<li>Paycheck per year: 365 (at most)</li>
<li>Payroll date: Everyday</li>
<li>Hours per pay period: 8 hours</li>
</ul>
&nbsp;
<h3>- Weekly</h3>
An employee designated with a weekly pay cycle is paid once per week with a specified starting date that automatically updates at the beginning of each pay period. Weekly pay is the most favorable type for workers paid hourly or has irregular schedules and freelancers. It is also best for employees who generate many overtime hours as they could be paid for their time quickly.
&nbsp;
A weekly pay could also become expensive with high time commitment, as you would incur cost and effort each time your payroll runs.
&nbsp;
<ul>
<li>Paycheck per year: 52</li>
<li>Payroll date: Usually every Friday of the week</li>
<li>Hours per pay period: 40 hours (regular) plus overtime (if any)</li>
</ul>
&nbsp;
<h3>- Bi-Weekly</h3>
Bi-weekly pay cycles are the most commonly used type by businesses and organizations. Designating this pay schedule means your employees get paid every two weeks. Their paychecks would arrive on a predetermined day of the week, which usually falls on a Friday.
&nbsp;
Two of the twelve months of the year would only have three pay periods, which could be difficult for some businesses that have to manage irregular bonus periods in their accounting and reporting. This is also true for benefit deductions because they usually occur on a monthly basis. You would need to manage those deductions based on 26 pay periods instead of only 12 for monthly cycles.
&nbsp;
<ul>
<li>Paycheck per year: 26</li>
<li>Payroll date: Usually every Friday of every other week</li>
<li>Hours per pay period: 80 hours (regular) plus overtime (if any)</li>
</ul>
<h3>- Semi-Monthly</h3>
Semi-monthly to bi-weekly pay cycles both pay employees twice a month. That is why some employers confuse and use them synonymously. Unlike bi-weekly pay schedules, which pay every other week, semi-monthly cycles have recurring paychecks twice per month. This means that regardless of how many weeks there is in a month, workers would still receive payments twice per month.
&nbsp;
If you choose to adopt a semi-weekly pay cycle, your employees could receive their salary on the first day and 15th day of the month or the 15th and last day of the month. Accounting teams and salaried employees prefer this method because they expect payroll to run twice a month.
&nbsp;
<ul>
<li>Paycheck per year: 24</li>
<li>Payroll date: Usually the 1st and 15th day, or the 15th and last day of the month</li>
<li>Hours per pay period: 87 hours</li>
</ul>
&nbsp;
<h3>- Monthly</h3>
The least common pay cycle for employees is the monthly-based period. However, they are not entirely unheard of. Some companies and businesses find that they benefit from using this method because it requires less time and lowers the cost to run payrolls. It also makes deducting insurance benefits and other premiums easier as they are charged on a monthly basis.
&nbsp;
While monthly pay cycles are suitable for business owners, it is the least preferred by employees. It would take a month for new workers to receive their first payment. They would also need to wait until the current pay period ends before they receive their paycheck. Employees would also have a hard time managing their personal expenses when they only get paid monthly.
&nbsp;
<ul>
<li>Paycheck per year: 12</li>
<li>Payroll date: End of the month</li>
<li>Hours per pay period: 173.33 hours (average)</li>
</ul>
<h2>What Pay Cycle Suits You The Best?</h2>
Pay cycles dramatically affect your business&rsquo;s operations, especially since it involves money and your employees. It influences your ongoing expenses and overall net income, as well as employee recruitment, retention, and satisfaction. When choosing the most beneficial pay cycle that suits your business, consider these five elements:
&nbsp;
<h3>- Payday Laws</h3>
&nbsp;
While other US states do not have specified regulations to determine your business&rsquo;s pay period, others observe these laws. They dictate when your employees should receive their paychecks, what type of employees have regulated paydays, and if any special exemptions may apply.
&nbsp;
<h3>- Employee Types</h3>
&nbsp;
Review what kinds of workers you have within your organization or business, considering which pay cycle would benefit them. As discussed earlier, you could have different types of employees at the same time with their respective preferred pay cycles. Adopt a more regular pay period, such as weekly cycles for hourly employees and bi-weekly or semi-monthly schedules for most salaried employees.
&nbsp;
<h3>- Costs</h3>
&nbsp;
Make sure to consider your budget as you choose a pay cycle. Each task and responsibility accompanying the management of payrolls have various costs you need to make yourself aware of. Remember that the more often you process paychecks, such as on a daily or weekly basis, the more costs add up. This means that too frequent pay schedules could end up burdening your business.
&nbsp;
<h3>- Cash flow</h3>
&nbsp;
In line with identifying the costs associated with running payroll, you would also need to secure enough cash flow to operate smoothly. Take advantage of the times of the month when your business generates the highest returns, selecting a pay cycle you are equipped to handle and ensures regular paydays occur.
&nbsp;
<h3>- Overtime</h3>
&nbsp;
According to federal law, employers need to <a href="https://www.realcheckstubs.com/blog/paystubs/pay-stub-generator-with-overtime" target="_blank" rel="noopener">calculate overtime rates</a> on a weekly basis. For example, an hourly, non-exempt employee would have a payroll that needs to include overtime weekly. You should also take into account this element even when using a bi-weekly or semi-monthly pay schedule.
&nbsp;
Businesses that employ hourly workers that most likely generate large amounts of overtime may run a payroll better using a weekly pay cycle.
<h2>How To Set Up Pay Cycles</h2>
An employer uses pay cycles to determine the frequency of pay periods and paydays for each position. First, list how many distinct combinations of pay cycle frequencies and pay dates your business uses, as each combination requires you to use a separate pay cycle.
&nbsp;
For example, your business could have a semi-monthly pay cycle frequency paid every first and fifteenth day of the month for management positions. Salaried or non-management positions could receive payment on the last day of the pay period in a weekly or bi-weekly cycle. Meanwhile, hourly employees could receive their pay on the Friday after the last day of the pay period.
&nbsp;
In this case, you would need to use three types of pay cycles, which you would then assign one to each position in your organization. To create a new pay cycle, specify a position&rsquo;s name and description. Then determine which of the following pay cycle frequencies is the most suitable for every position. It could be daily, weekly, bi-weekly, semi-monthly, monthly, quarterly, semiannually, and annually.
&nbsp;
In some cases, different groups of positions could have the same pay cycle but have different paydays. As such, you could pay both salaried and hourly employees a bi-weekly frequency. If both positions receive their payment on the last working day of the pay period, you could employ the same pay cycle for salaried and hourly workers.
&nbsp;
However, if hourly employees receive payment on the Friday after a pay period&rsquo;s last working day, but salaried workers receive payment on a pay period&rsquo;s last working day, you need to assign two bi-weekly cycles for each type. Designate one bi-weekly pay cycle for salaried workers and another bi-weekly pay cycle for hourly workers.
<h2>What Is a Payday?</h2>
This is usually your employees&rsquo; favorite day during the pay period. Also known as the check date, payday is when they regularly receive their compensation, typically in the form of paychecks. Payday depends on which pay cycle you choose based on the previous considerations discussed.
&nbsp;
Payday also determines the due dates for payroll tax filings and deposits, reflecting on the paychecks or paystubs issued. It is your responsibility to meet the required deadlines for paying monthly federal and state taxes. This is still true even when you issue only a single paycheck. If you fail to deliver on time properly, you could face penalties that could hurt your bottom line.
<h2>What Is a Pay Period?</h2>
Pay period refers to the full stretch of time your employees performed their jobs. This is the total hours or days a worker completes before payday. For example, if your employees worked from April 1st to 15th, the amount of time done is the pay period, reflecting on their paystubs.
&nbsp;
As previously discussed, daily pay periods produce at most 365 paychecks per year, while weekly pay periods generate approximately 52 paychecks per year. Daily and monthly pay periods are the least common and least popular types for employers and employees. Meanwhile, monthly, semi-monthly, and biweekly make 12, 24, and 26 paychecks each year, respectively.
&nbsp;
Employee paystubs reflect pay periods detailing how many hours an employee worked before payday. The check stubs also include the pay rate, benefits, and deductions, such as taxes withheld and contributions. For salaried and exempt employees, their pay depends on an annual amount divided by the number of pay periods in a year.
<h2>Conclusion</h2>
Running a smooth business means that you need to consider and understand every aspect of each element carefully and monitor them closely. One of the most potentially confusing topics is the difference between pay cycle, payday, and pay period.
&nbsp;
The pay cycle describes the frequency of when employees receive their payment, payday refers to the day they receive the payment, and pay period covers the time your employees performed their jobs. Determining these terms are essential as they influence your ongoing expenses and overall net income, as well as employee recruitment, retention, and satisfaction.

Also known as a 'pay schedule,' a pay cycle describes the frequency when an employer pays their employee for work rendered. It tells you how often payroll runs and the specific days your workers receive their salary. The pay cycle takes into account the day that you issue payment to the employee, known as payday, and the period an employee worked that reflects on their paystub, known as the pay period.

What Is a Pay Cycle?

Pay cycles dramatically affect your business’s operations, especially since it involves money and your employees. It influences your ongoing expenses and overall net income, as well as employee recruitment, retention, and satisfaction.

What Pay Cycle Suits You The Best?

An employer uses pay cycles to determine the frequency of pay periods and paydays for each position. First, list how many distinct combinations of pay cycle frequencies and pay dates your business uses, as each combination requires you to use a separate pay cycle.

How To Set Up Pay Cycles?

Learn the difference between pay cycle, pay day, and pay period.  Stay informed and take control of your finances with our helpful guide.

The Difference Between Pay Cycle vs Pay Day vs Pay Period

Pay Cycle, Pay Day, Pay Period - What’s The Difference Between Them?

As a freelancer, have you ever tried to request a loan from a bank only to be turned away because you could not provide proof of income?
Being your own boss certainly comes with many advantages as you only answer to yourself, you could pick your schedule, and you are no one's employee. However, you may wonder <a href="https://www.realcheckstubs.com/blog/paystub/how-to-get-check-stub">how to create pay stubs if self-employed</a>, given that no employer would give you one.
This article would not only help you know the ins and outs of paycheck stubs for self-employed but also teach you how to make them. So read on and take advantage!
<h2>What Are Self-Employment Pay Stubs?</h2>
If your employment status is self-employed and you are new to self-employed pay stubs, making one could become confusing and tedious. Though, as you go along your journey to becoming a successful freelancer, a paycheck stub for self-employed would go a long way.
For a freelancer or the self-employed, payment generally comes either in a paycheck or in cash. If you want to request a bank loan or any loan, pay stubs are one of the important documents to have. Presenting your paycheck would not help either and most likely guarantee that you would be turned away.
&nbsp;
Most of the time, banks would request a breakdown of your income for them to base your loan on. This is where self-employment pay stubs come in very useful.
&nbsp;
One of the best ways to<a href="https://www.realcheckstubs.com/blog/paystubs/proof-of-income-everything-you-should-know-about-it" target="_blank" rel="noopener"> provide proof of your income</a> is through a pay stub, especially for self-employed people. If you are doing a freelance job, and you want to get a car loan, self-employment pay stubs are the way to go for providing your income statement.
&nbsp;
Pay stubs will help banks and other lenders determine if you are earning enough and capable of paying them. They document all details of someone's income from gross pay to net pay, including all information on taxes, deductions, benefits, and additions. They act as paycheck proof, summarizing the totality of how much you take home.
&nbsp;
<img src="https://www.realcheckstubs.com/media/realcheckstubs.com - employee paystub.jpg" alt="What Are Self-Employment Pay Stubs?" width="1920" height="1280" />
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Generally, employers give paycheck stubs to their employees as income statements, and usually, your clients do not have pay stubs to give. However, it is still possible for you to create a self-employment stub yourself.
&nbsp;
Making your own template would give you more freedom when it comes to customization. You would be able to put more detail and information into your payslip.
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Additionally, when it comes to filing your taxes, entering the correct information would become more manageable.
<h2>Advantages of Check Stubs for Self-Employed</h2>
You could consider a self-employed earnings statement, along with pay stub generators, as a tool for your accounting needs. Freelancers and self-employed people such as lawyers, doctors, and other professionals would sometimes hire staff such as secretaries and receptionists, so creating pay stubs becomes a crucial part of the business.
<h3>Proof of Income</h3>
As stated earlier, when taking out a loan for a car or house from a bank, one of the best ways to provide proof of income is through a pay stub. Self-employed check stubs would provide lenders details of your cash flow because they would want to know if you have cash left at the end of the month. Although it may seem personal, pay stubs would verify that you are financially capable of paying loans or rents.
<h3>Show Profit and Loss Statements</h3>
As with any business, it is best to keep track of your income and business expenses. Pay stubs would make your job easier, faster, and more accurate when accounting for your cash flow. You would also see your progress as you grow. However, as you are the boss, you should be honest with the information you insert in the statement.
<h3>Keep Track of Invoices and Contracts</h3>
Pay stubs for self-employed people also act as a record of invoices and contracts between clients and customers. They keep you updated with your taxes and contributions, and sources of your income. Online check stub generators could store all records in cloud storage, giving you access to data anytime you need them.
<h3>Paystub Generator for Self-Employed Boosts Productivity</h3>
Using a pay stub generator would significantly increase the speed of accounting your money, making it easier to perform and less tedious. Online generators, such as <a href="https://www.realcheckstubs.com/generateStubs" target="_blank" rel="noopener">Real Check Stubs</a>, saves you time using pay stub templates with customizable information. You simply input the necessary data, and it automatically calculates your taxes and net income.&nbsp;
<h3>Filing Your Tax</h3>
At times, to acquire a loan, banks require you to provide them with your latest tax returns. The details of your taxable income would tell lenders if you have enough money to get a loan. If you lower your taxable income for some instance, banks will not approve the loan, as it would reflect that you do not have enough money.
Some freelancers preserve their income by reducing the taxable amount. However, this practice would lead to lower loanable amounts too.
Understanding how to create pay stubs would make filing taxes faster and easier and <a href="https://www.realcheckstubs.com/blog/paystubs/top-13-small-business-accounting-advice-to-save-your-money" target="_blank" rel="noopener">save you fees from hiring an accountant</a>.
<h3>Professionalism</h3>
Using a self-employed pay stub generator creates a professional atmosphere in your work, making you more reliable and trustworthy. Pay stub services to save you time, money, and effort while enjoying the benefits of having instant access to all files. Pay stub generators also create official documents for when you get paid for your services.&nbsp;
<h2>How To Make Pay Stubs if Self-Employed?</h2>
Creating pay stubs is not that difficult of a process. However, you would need to pay close attention to all details, as they are considered legal documents.&nbsp;
&nbsp;
Every pay period, employees receive pay stubs from their employers. As for freelancers and self-employed, they would need to make it themselves. If you are paid on a project basis or have a contract that lasts for months, make a pay stub every time you get paid.
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<img src="https://www.realcheckstubs.com/media/realcheckstubs.com - employer pay slip.jpg" />
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You could <a href="https://www.realcheckstubs.com/blog/paystub-generator/online-stub-generator-vs-pay-stub-template-excel" target="_blank" rel="noopener">use a spreadsheet to make your pay stub template </a>after every project or contract, inputting all calculations before beginning. Alternatively, you could use self-employed pay stub generators, such as RealCheckStubs, to generate your pay stubs for you.
&nbsp;
Online generators provide a more convenient experience, as they provide formatted templates, provide you with what information is needed, and automatically calculate results.
&nbsp;
The following are the information you would typically find in any template format provided by <a href="https://www.realcheckstubs.com/blog/paystub/everything-you-need-to-know-about-using-a-free-check-stub-maker-online" target="_blank" rel="noopener">online pay stub generators</a>.
<h3>&nbsp;</h3>
<h3>Gross Income/Pay</h3>
Your gross income or pay is how much a client or customer owes you after a project or a contract before taking out any deduction. This is your base income and the basis for all subsequent computations. You could easily <a href="https://www.realcheckstubs.com/blog/paystubs/how-to-calculate-adjusted-gross-income-from-pay-stub">calculate your gross income</a> by dividing your annual salary by the number of times you received payment. 
So if you are paid on a monthly basis, divide your annual salary by twelve. Keep in mind that for this part, you would need to ignore money taken out for taxes.
<h3>&nbsp;</h3>
<h3>Taxes and Deductions</h3>
Taxes and deductions are anything taken out of your gross income, such as contributions, benefits, local and state taxes, and Social Security Taxes. You could also refer to the IRS Employer's Tax Guide for a more in-depth and updated list and descriptions of all applicable taxes you would need to pay as a freelancer or self-employed.
&nbsp;
Just like regular employees, the earning statement for self-employed shows that your company pays you regularly, which means all necessary taxes are withheld from each paycheck. Withholding amounts keep you aware of all taxes owed at year&rsquo;s end. It is better to withhold from each paycheck than to make up estimated quarterly payments or lump sums during tax filing.
<h3>&nbsp;</h3>
<h3>Net Income/Pay</h3>
You can derive your net income from subtracting all applicable taxes, deductions, contributions, and other necessary charges to your gross income. Fortunately, self-employed pay stubs generators could do this function automatically and accurately. You just need to make sure to input all information correctly.
&nbsp;
Net income is the amount you find at the last entry in your self-employed pay stub.
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If you are the only employee in your company, you may still want to create a payroll system to issue self-employed check stubs to yourself. Meanwhile, if you have employees under your payroll system, then you could add yourself to the system. Doing this establishes your pay rate and withholding information.
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You may also opt for payroll services where bank affiliates, bookkeepers, and accountants issue your check stubs.
<a href="https://www.realcheckstubs.com/blog/paystubs/gross-pay-vs-net-pay-on-a-pay-stub-what-the-difference">Gross Pay vs Net Pay On Pay Stub - What's The Difference?&nbsp;</a>
<h2>Conclusion</h2>
Freelancers and self-employed range from architects, lawyers, and doctors. They enjoy the many advantages of being their own boss. However, even self-employed have to take responsibilities such as providing proof of income for loans and filing for taxes. This is where a self-employed pay stub generator could greatly help provide official documents for payments towards their services.

As a freelancer, it can be challenging to prove your income when request a loan from a bank. Find out how self-employed pay stubs can be used as proof of income

Proof of Income For Freelancers: Self-Employed Pay Stub

Self-Employed Pay Stub as a Freelance Proof of Income

Real Check Stubs' flexible system allows you to <a href="https://www.realcheckstubs.com/blog/paystubs/why-you-should-customize-your-paycheck-stubs">customize your paystubs </a>to fit your needs.
<h2>Explore Customizable Options&nbsp;</h2>
You can customize:
<ul>
<li>specific date ranges,</li>
<li>types of pay (hourly, salary, contractor),</li>
<li>types of employment,</li>
<li>deposit slips,</li>
<li>background on stubs,</li>
<li>company abbreviation and a lot more.</li>
</ul>
Your paycheck stub should be unique to you and should reflect the details of your situation. We have and will continue to make improvements to assist you in your journey to the perfect paycheck stub.
It's ridiculous how passionate we are about paycheck stubs and how much attention to detail we give when it comes to stubs.
If you have a suggestion for a new improvement please leave it in the comment section.

Do you want to customize your paycheck stub? Then, explore 16 different templates of Real Check Stubs and make your stub unique by one of them.

Customize Your Paystub | Real Check Stubs

Customizable Options

There are times as an entrepreneur or business owner you may need to record your income or provide a worker with a record and detailed breakdown of their paycheck.
It's important to understand the different deductions that may be required if you have not yet completed those calculations, it is also important to have a clear understanding of how these deductions may come into play.
You could simply write these on a piece of paper. However, we know that is not the professional way and does not convey the best represent you and all the hard work you have put into your company.
<h2>Professional Check Stub Maker</h2>
<a href="https://www.realcheckstubs.com/blog/paystub-generator/the-best-paystub-generator">Real Check Stubs</a> is here for you. It's important that your company is seen as professional by your workers and the world.
Real Check stubs provide high-quality professional paycheck stubs that give you the option of listing deductions or simply <a href="https://www.realcheckstubs.com/blog/paystubs/gross-pay-vs-net-pay-on-a-pay-stub-what-the-difference">the gross pay. </a>
You also have several configuration options and 16 templates to select from. When printed the high quality is immediately apparent.

Here's your chance to review the various paystub templates our pacyheck stub generator makes. Discover why we are known as the go to place for real paystubs.

Create Your Paystub with Our High-Quality Check Stub Maker

High Quality Professional Paycheck Stub Maker

As a <a href="https://www.realcheckstubs.com/blog/payroll/best-payroll-advice-for-small-businesses" target="_blank" rel="noopener">small business owner or contractor</a>, you have probably experienced the frustration of paperwork and payroll.
Your staff needs documentation to prove they have been paid and most payroll companies require you to jump through hoops you couldn't dream of.
There has to be an easier way to handle payroll. Contractors are paid in cash in most cases, how should that be handled, who keeps the records?
<h2>Real Paycheck Stub</h2>
How do you provide them with a real paycheck stub? You have questions and we have answers! Our real paycheck stub system allows you as a business professional to create real paycheck stubs to provide your staff with instantly.
This is important to them when they need to provide proof of income or keep records of pay.
<h2>Create Your Stub in Minutes</h2>
Simply entering your business information and basic employee information is all that is needed. Paycheck stubs are delivered instantly after purchase and a backup copy is also sent to your email address.
The paystubs are provided in pdf format for your convenience. Ultimately the pdf format means that the stubs can be viewed on a mobile device as well as virtually any smartphone, tablet, or computer in the world!
You're smart and know you only want to provide your staff with the best documents available.
&nbsp;
Other articles you may be interested in:
<a href="https://www.realcheckstubs.com/blog/paystubs/employee-pay-stub-online-salary-slip-maker">Business Slip Makers</a>
<a href="https://www.realcheckstubs.com/blog/paystubs/ultimate-guide-to-pay-stubs">Guide to Paystubs</a>

The ultimate guide on everything proof of income.  You should be informed when making a paystub and this guide will tell you how.

Make a Real Pay Stub in 1 Minute

Real Paycheck Stubs

ASHLEY

I'm a new customer . I will like to say this was easy fun and very quick . i most certainly will do this again.

GOASH

Yoshi T.

I'm a returning customer. I'll never use any other service.RCS is the best!

jimmy williamson

Mina

This is so fast and easy to do and to get your stubs easily and fast then ever ! I recommend!! Great low price compared to other company!!

Great service !!

David

I want to leave a 5 star review. I had got in contact with customer service to let them know I had mess up on the check stubs. They responded back fast and gave me a complementary adjustment for free. They was very professional and understanding. I would like to say thank you and this will be my number one go to if I need check stubs. Thanks once again.

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Tag: how to make a payroll stub