Differences Between Pay Stubs and W-2 Forms

 

We outline the importance of pay stubs in managing personal finances and W-2 forms in filing taxes, and provide tips for keeping track of both documents. Learn about the differences between pay stubs and W-2 forms with our comprehensive guide.

Pay stubs are given to workers each time they are paid, while W-2 forms are issued once a year, typically in January or February. Pay stubs are used by workers to keep track of their earnings and deductions for each salary period, while W-2 forms are used by employees when filing their income tax returns. 

Paystub and W-2 forms are different in terms of content. Pay stubs give detailed information about an employee's salary for a specific payment course, such as gross pay, deductions, and net pay. W-2 forms give a summary of a worker's earnings and taxes paid for the entire year with the worker's name, address, and Social Security number in it. The employer's address and identification number and the total amount of wages earned during the year are included too.

The total amount of earnings, salaries, tips, bonuses, and other types of remuneration that an employee earned from their company during the tax year is referred to as gross income on a W-2 form. The gross income indicates the employee's total earnings before any changes are made for taxes, retirement contributions, or other deductions because it is determined before any taxes or other deductions are subtracted. The sum is significant because it serves as the foundation for figuring out the employee's annual taxable income, which determines their tax liability.

The issuance of pay stubs and W-2 forms are different because they serve different purposes and are issued at different times. Here are the main differences in terms of issuance. Pay stubs are issued by employers to their employees each time they are paid, whether it is weekly, bi-weekly, or monthly. The pay stub provides a detailed breakdown of the employee's pay for that specific pay period, including the amount of gross pay, deductions, and net pay. W-2 forms, on the other hand, are issued by employers to their employee's end-of-year pay stubs, typically in January or February, for the previous year's earnings. The W-2 form summarizes the employee's earnings and taxes paid for the entire year, including federal, state, and local taxes withheld from the employee's paychecks.

They are used for a variety of purposes, such as verifying income, filing taxes, budgeting, and record-keeping. The content of a pay stub and a W-2 form are different because they serve different purposes.

 

 

What is a Pay Stub?

A pay stub is necessary as it shows employees a record of their earnings and deductions for each pay period. It is valuable for tax planning and budgeting. Pay stubs help in guaranteeing that workers are paid fairly and appropriately. A pay stub is a document that shows an employee's earnings and deductions for a specific pay period. It is typically provided by an employer along with each paycheck, while the term “Year-End Pay Stubs” includes non-taxable income items. The purpose of a pay stub is to provide employees with detailed information about their pay, including the amount they earned before and after taxes, the amount of taxes withheld, and any other deductions or contributions made from their paychecks.

What is the Importance of Pay Stubs?

Pay stubs are important for employees because they provide a detailed record of their earnings and deductions, which is used to verify that they were paid correctly and to calculate how much they owe in taxes. They are useful for employers, who use them to keep track of employee earnings and deductions for tax and accounting purposes.

Pay stubs are significant for several reasons. They enable workers to manage their finances more effectively by giving them a clear picture of their earnings and deductions. Pay stubs are used as evidence of income when applying for loans, rentals, and other financial transactions. Additionally, they support firms in maintaining correct payroll records and abiding by labor and tax regulations.

What is in the Pay Stubs?

A typical pay stub includes the employer and employee’s information, it contains essential details like the following

• Gross Pay: The employee's gross pay is their full salary without any withholdings made. It covers each kind of payment, including salaries, hourly rates, tips, commissions, and bonuses. It is the sum of money on which a worker's salary or hourly rate is calculated, except for any deductions for things like taxes, insurance premiums, or retirement contributions. The calculation of a worker's taxes, perks, and other deductions, which are based on a ratio of their earnings, is done using their gross pay, that's why it is necessary. Additionally, it is used to see whether a worker qualifies for programs and benefits that are based on their income status.
• Taxes Withheld: Taxes withheld are the sums that employers remove from workers' wages to settle for any income taxes owed by the workers. Federal, state, and local taxes are part of tax obligation. The number of subsidies claimed on the worker's W-4 form, their filing status, and their proceeds are all taken into account when determining the amount of taxes to be withheld. Tax withholding is important because it guarantees that a worker's tax due is paid over the course of the year rather than all at once at tax time. Workers who have too little tax withheld end up owing more at the end of the year and be penalized for underpayment. However, a worker is entitled to a refund when taxes are filed and if excessive tax is withheld.
• Social Security and Medicare Contributions: Social Security and Medicare contributions are removed from an employee's income and used to finance the programs. Individuals who qualify for the requirements receive retirement, disability, and survivor benefits through a federal program called Social Security. People 65 and over, as well as some disabled young people, are protected by Medicare, a federal health insurance program. Both the employer and the worker are necessary to contribute to the Social Security and Medicare systems.
• Insurance and Benefit Deductions: Insurance and benefit deductions are important because they help employees to manage their overall financial well-being by providing access to important benefits that help with healthcare expenses, retirement savings, and other financial needs. The deductions are usually elective and the employee has the option to opt in or opt out of the coverage. Some benefits the required by law, such as certain types of health insurance coverage.
• Net Pay: Net pay is the amount of money an employee receives in their paycheck after all deductions have been taken out. It is the employee's take-home pay or the amount they are expected to receive in their bank account or in the form of a physical paycheck. Net pay is calculated by subtracting all of the deductions from the employee's gross pay. Net pay is important because it represents the actual amount of money an employee receives for their work. It is the money that an employee use to pay their bills saves for the future, and meet their financial obligations. Understanding net pay is important for budgeting and financial planning, as it helps employees to determine how much money they have available for discretionary spending after all of their necessary expenses have been paid.

How Often is Pay Stub Issued to Employees?

The frequency of pay stub issuance to employees varies depending on the employer and the state or country where the employee works. However, in general, pay stubs are usually issued along with each paycheck, whether the paycheck is issued in paper or electronic form.

In the United States, most states have laws that require employers to provide employees with a pay stub each time they are paid, either through electronic means or as a physical document. Some states require employers to provide pay stubs only upon request, while others require pay stubs to be provided on a regular basis.

The laws regarding pay stub issuance are different in other countries. For example, in Canada, employers are required to provide employees with a pay stub or statement of earnings, which is provided electronically or in paper form, at least once per pay period. It is important for employees to familiarize themselves with the pay stub requirements in their state or country, and to ensure that they are receiving accurate and complete pay stubs with each paycheck.

What is the Purpose of Pay Stubs?

A pay stub, known as a payslip, is a document that an employer provides to an employee as a record of their pay and deductions. The purpose of a pay stub is to provide the employee with a detailed breakdown of their pay, including the amount they earned during the pay period, the amount of taxes withheld, and any deductions made from their paycheck.

Pay stubs serve several purposes, including verification of income, tax filing, budgeting, and employee record keeping. 

Pay stubs are commonly used to verify an employee's income when they apply for loans, mortgages, or other forms of credit. The documents provide evidence of the employee's regular income and help lenders make informed decisions about lending money.

Pay stubs provide employees with information on the amount of taxes withheld from their paychecks. The information is necessary for employees when they file their annual tax returns.

Pay stubs are useful for employees to track their income and expenses, and help them to create a budget for their finances.

Pay stubs provide a record of an employee's pay, and are used for future reference. Employers are often required by law to keep a record of their employee's pay and tax information for a certain amount of time, and pay stubs are used for their purpose.

Pay stubs serve as an important record of an employee's pay, taxes, and deductions. They are used for a variety of purposes, including verifying income, filing taxes, budgeting, and record-keeping.

What Does Year End Pay Stubs Look Like?

Year-end pay stubs, known as W-2 forms, are a summary of an employee's earnings and tax withholding for the entire calendar year. Employers are required to provide employees by January 31st of the following year. They are important documents that employees need in order to file their annual income tax returns. The pieces of information needed for W-2 are employee Information, employer information, year-to-date earnings, tax withholdings, social security and Medicare taxes, and other deductions.

Employee’s information is Employee's name, Social Security number, and address. The employer's name, address, and Employer Identification Number (EIN) are needed for the employer’s details. Year-to-date earning is a summary of the employee's total earnings for the year, including their salary, hourly wages, tips, bonuses, and any other compensation. Tax withholding is the breakdown of the federal, state, and local taxes withheld from the employee's pay during the year. The amount of Social Security and Medicare taxes withheld from the employee's pay during the year. Any other deductions made from the employee's pay during the year, such as contributions to retirement plans or health insurance premiums. The total amount of earnings, taxes withheld, and deductions for the entire year.

Does Pay Stubs include Tax Details?

Yes, pay stubs usually include tax details. The amount of taxes that are withheld from an employee's paycheck is typically included on their pay stub. It includes federal, state, and local taxes, as well as Social Security and Medicare taxes.

Pay stubs include other tax-related information, such as the employee's filing status (such as single, married filing jointly, or head of household), the number of allowances claimed on their W-4 form, and any additional taxes or withholdings that the employee has elected to have taken out of their paycheck. Having tax information included on pay stubs is important for employees because it helps them keep track of how much money they are paying in taxes throughout the year. It provides documentation that is used when filing annual tax returns.

It is worth noting that while pay stubs generally include tax details, the level of detail varies depending on the employer and the format of the pay stub. Some pay stubs provide a detailed breakdown of each type of tax that is withheld, while others simply provide the total amount of taxes withheld.

What is a W-2 Form?

A W-2 form, known as the Wage and Tax Statement, is a document that employers are required to provide to their employees at the end of each calendar year. The purpose of the W-2 form is to provide employees with a summary of their earnings and tax withholdings for the previous year.

The W-2 form displays the employee's entire compensation from the employer as well as the total amount of income taxes, Social Security, and Medicare withheld from the employee's paychecks throughout the course of the year at the federal, state, and local levels. The W-2 form includes employee information, employer information, earnings, tax withholdings, Social Security and Medicare Taxes, and other deductions. 

The W-2 form is important because it is used by employees to file their annual income tax returns. Employees include the information from their W-2 forms when they file their taxes, and the form is used by the Social Security Administration to keep track of an employee's earnings for Social Security and Medicare purposes. Employers are required to provide employees with their W-2 forms by January 31st of each year.

A W-2 form is a document that employers in the United States are required to provide to their employees at the end of each calendar year. The W-2 form, known as the Wage and Tax Statement, provides a summary of the employee's earnings and tax withholdings for the previous year. The W-2 form includes important information such as the employee's name, address, and Social Security number, as well as the employer's name, address, and Employer Identification Number (EIN). It includes information about the employee's earnings, tax withholdings, and other deductions made from their pay during the year.

The purpose of the W-2 form is to provide employees with the information they need to file their annual income tax returns. The information on the W-2 form is used to calculate how much income tax the employee owes, and how much of their income was subject to Social Security and Medicare taxes. Employers are required to provide employees with their W-2 forms by January 31st of each year, and the employee needs to use the information on the form to file their taxes by the April 15th deadline.

What is the Importance of W-2 Form?

The W-2 form is an important document for both employees and employers in the United States.

It provides valuable information about an employee's earnings, taxes withheld, and other deductions. It is used for tax filing purposes, verification of income, and compliance with IRS regulations. The reasons why W-2 Form is important are the W-2 form provides employees with the information they need to file their income tax returns. The form shows the total amount of income earned, the amount of taxes withheld, and any other deductions or credits that affect their tax liability. 

The second reason is W-2 form shows the amount of Social Security and Medicare taxes that were withheld from an employee's pay during the year. The information is used to calculate an employee's eligibility for Social Security and Medicare benefits. The third reason is the W-2 form is an official record of an employee's income for the year. It is used to verify income when applying for loans, credit cards, and other financial services. 

The fourth reason is employers are required to keep a copy of the W-2 form for each employee for at least four years. It helps employers keep accurate records of their payroll and tax obligations. The fifth and last reason is employers are required by law to provide employees with their W-2 forms by January 31st of each year. Failure to comply with the requirement results in penalties and fines from the IRS.

The W-2 form is an important document for both employees and employers because it ensures employees are paying the right amount of taxes and getting the right credit for any tax payments they make throughout the year.

What is in the W-2 Form?

Listed below is the information included in the W-2 Form.

• Employee Information: It includes the employee's name, address, and Social Security number.

• Employer Information: It includes the employer's name, address, and employer identification number (EIN).
• Wage and Tax Statements: The total amount of wages, tips, and other compensation paid to the employee during the year, as well as the total amount of federal, state, and other taxes withheld from the employee's paycheck.
• Social Security and Medicare Tax: The employee's share of Social Security and Medicare taxes, as well as the employer's share of the taxes.
• State and Local Taxes: The total amount of state and local taxes withheld from the employee's paycheck.

How Often Does W-2 Form is Issued to Employees?

Employers need to provide their staff with W-2 forms detailing the previous year's wages and tax deductions by January 31st of each year. W-2 forms are thus frequently provided to employees once a year.  The W-2 form's function is to provide information about an employee's earnings and tax withholdings for the year that the employee uses to complete their individual income tax return. Other data is reported on the form, including state and local taxes withheld, Social Security and Medicare taxes withheld, and contributions to retirement plans.

Employees are required to carefully study it for their W-2 forms to appropriately reflect their income and withholdings for the year. Any errors or discrepancies require to be discussed with the employer immediately.

What is the Purpose of W-2 Form?

The objective of the W-2 form is to record an employee's earnings and withholding tax for the entire year. It is a tax document that needs to be filled out and given to employees by their employer every 31st of January.

The worker's earnings, extras, and other perks from the employer are all listed on the W-2 form, along with the full payment of federal, state, and local taxes withheld from the worker's salary throughout the year. The form contains details regarding withdrawals from state and local taxes, contributions to retirement programs, and taxes for Social Security and Medicare.

Employees use the details on the W-2 form when preparing their individual income tax forms. The details on the form are used to determine whether the worker qualifies for a refund or has higher tax liabilities. Employees have to carefully review it to ensure that their W-2 form accurately represents their income and withholdings for the year. It is important to speak with the employer immediately if there are errors.

Does W-2 Form Include Tax Details?

Yes, the W-2 form does contain tax details. One of the tax-related facts on the W-2 form is the total amount of federal, state, and local taxes withheld from a worker's paychecks throughout the year. In addition to the Social Security and Medicare taxes withdrawn from the worker's pay, it also includes any additional taxes or deductions that have been made, such as health insurance premiums, disability benefits, and retirement program payments

The W-2 form's tax details are included to give workers the data they need to correctly fill out their individual income tax forms. The data on the W-2 form is used to ascertain the employee's tax burden and whether they are qualified for a refund or owe extra taxes. Workers need to carefully confirm their W-2 forms to make sure that all of the tax information is correct. To ensure that the right information is reported to the IRS, any inaccuracies or discrepancies need to be discussed with the employer immediately.

How to Calculate W2 Wages from Paystub?

A worker has to compute the annual earnings and tax withholdings to specify the W2 wages from the paystub.

Listed below are the five steps in calculating W2 Wages from Paystub. 

1. Determine the gross pay. The whole amount of the earnings prior to deductions is the gross pay. On the pay stub, look for the "gross pay" or "total earnings" line.
2. Subtract pre-tax deductions which are made for things like 401(k) plan contributions or health insurance premiums. Federal income tax, Social Security, and Medicare taxes are not applied to the deductions. Find the pre-tax deductions column on the pay stub, then deduct the entire amount from the gross salary.
3. Calculate federal income tax withholding. Find the federal income tax withholding section on the pay stub to calculate the amount that is withheld from the federal income. It is the sum that was deducted from the paycheck as federal income tax withholding. Using the IRS tax withholding calculator is helpful.
4. Calculate Social Security and Medicare taxes. Find the Social Security and Medicare tax withholding area on the pay stub to calculate the Social Security and Medicare taxes. The taxes pay for the benefits provided by Social Security and Medicare. The Medicare tax rate is 1.45%, whereas the Social Security tax rate is 6.2%. The total Social Security and Medicare tax withholding are determined by adding the Social Security and Medicare taxes together and multiplying the result by two.
5. Subtract additional deductions. Subtract any other deductions that are listed on a pay stub, such as state income taxes or garnishments. After all other deductions have been made, deduct the total of the payments from the pay.

It is crucial to remember that the pay stubs do not contain all the data required to fully compute the W2 wages. For instance, any deductions for health insurance, retirement plan contributions, or other expenses that are listed on the W-2 form. It is preferable to speak with a tax expert or the employer's payroll department if confused about how to calculate the W2 wages from pay stub. 

The data is useful to complete the W-2 form by calculating the W-2 wages when it comes time to pay the taxes. It is a good idea to seek advice from a tax expert for any queries or worries about determining the W-2 pay.

How Does Pay Stubs and W-2 Forms Impact the Tax Filling for Employees?

Pay stubs and W-2 forms keep a substantial effect on employee tax filing. Employees view the salary, deductions, and net income per pay period on their pay stubs. It is critical to compute an employee's year-to-date (YTD) earnings and tax withholdings when preparing income tax returns. The W-2 form, which companies are required to give to their employees by January 31st of every year, is filled up using the data on pay stubs. An employee's total earnings and tax withholdings for the year are outlined on the W-2 form when filing federal and state income tax returns.

Workers use the data on their W-2 forms to record their incomes and tax expenses for the year when they file their tax returns. The IRS compares the data on the tax return with the data provided by the employer on the W-2 form to ensure accuracy. Inaccurate information on the W-2 form results in mistakes on the employee's tax return, which incurs fines or interest charges from the IRS. Employees have to carefully check their pay stubs and W-2 forms to make sure that all of the data is correct and up-to-date.

W-2 forms and pay stubs are crucial records that affect how an employee files their taxes. Accurate and comprehensive information on the documents is essential for the purpose of preventing errors in tax filing and subsequent fines.

How Does Pay Stubs and W-2 Forms Affect the Employee's Eligibility for Government Benefits?

W-2s and pay stubs have no direct bearing on a worker's ability to receive government benefits. The details in the documents inadvertently affect a person's ability to get certain benefits that depend on income or tax withholdings.

For instance, eligibility for certain government programs, like Medicaid or subsidized housing, is determined by income level. The amount of income detailed on a worker's pay stubs or W-2 forms affects whether they are qualified for the programs. A worker's eligibility for certain tax benefits, such as the Earned Income Tax Credit, is impacted by the amount of taxes taken from their paycheck. A refundable tax credit working for individuals and families with low to moderate income is the EITC. The amount of the credit is determined by the taxpayer's earnings and the number of children who are entitled to it.

Taxpayers have to submit a tax return and be eligible in order to claim the EITC. Their eligibility for the credit is determined using the data on their W-2 form. Pay stubs and W-2 forms do not directly affect a worker's eligibility for government benefits, the data they include do so inadvertently for programs or tax credits that are based on income or tax withholdings.

What Does the Law Says About Issuing of Pay Stubs and W-2 Form for Employees?

The legislation requires employers to give their staff members W-2 forms and pay stubs. State regulations demand pay stubs, and each state has different criteria that require to be met. Others only do so upon request or with the employee's express written approval, while several states mandate that pay stubs be given with every single paycheck. The name of the workers, dates of the pay period, gross wages earned, deductions made, and net pay all need to be included on pay stubs.

Federal law mandates that employers issue W-2 forms to their staff members by January 31 of every year. It details the annual tax withholdings and an employee's total compensation. Employers need to give a copy of the W-2 form to the Social Security Administration (SSA). Employers are penalized for failing to deliver pay stubs or W-2 forms. Employers who do not give workers pay stubs risk fines and further consequences. Employers obtain fines for failing to provide W-2 forms, and workers encounter uncertainties in filing their tax returns and getting any tax refunds they are due. Both employers and workers are necessary to be disclosed the legal conditions connected to pay stubs and W-2 forms to maintain adherence to the law and prevent any potential damages.

For instance, in the United States, employers are mandated to issue pay stubs and W-2 forms to their workers. Pay stubs are required by state law, and the specific cases differ depending on the state. Several states require more additional data on the pay stub, like the worker's year-to-date income and deductions or details about sick leave or vacation earnings.

The punishments differ depending on the state and the individual offense, such as pay stubs. Employers that fail to furnish pay stubs or who do so in an incomplete or erroneous manner are subject to penalties or other liabilities. Employees who are not given pay stubs are liable to penalties or damages in several areas.

Employers who don't give W-2 forms to their staff by the deadline risk penalties from the Internal Revenue Service. (IRS). Failure to submit an accurate W-2 form to the Social Security Administration (SSA) ] results in fines of up to $270 per form, with a cap of $3,339,000 annually for large firms. Failure to provide a W-2 form to employees results in fines of up to $550 per form, with a cap of $6,669,000 for large companies. There are cases where extra penalties or fines if the failure to deliver pay stubs or W-2 forms was the result of deliberate neglect or purposeful disrespect of the law. It is crucial to note that the consequences for non-compliance vary based on the exact circumstances.

The consequences for failing to submit or provide pay stubs and W-2 forms vary based on the circumstances and the relevant laws. A $50 fine per unfiled W-2 form, up to a maximum of $536,000 per year, is assessed by the Social Security Administration (SSA) for failure to submit a W-2 form. The fine rises to $550 per form if the failure to file was the result of deliberate disregard, with no upper limit. W-2 forms need to be given to employees, and failing to do so results in fines of $50 for each form, up to a total of $532,000 per year. The fine rises to $550 per form if the failure to submit the form was willful disregard, with no upper limit.

Penalties that differ by state apply if ]fail to present a pay stub. Pay stubs are a requirement in several states, and failure to deliver them results in penalties or fines. For instance, California law allows for fines of up to $4,000 for employers who fail to furnish a pay stub for the first pay period and $50 and $100 for each succeeding pay period. It is vital to keep in mind that the above information is merely broad principles and that individual situational factors affect the real fines and penalties. It is always better to speak with a tax or legal specialist.

Are Employers Required to Provide Pay Stubs and W-2 Forms?

Yes, it is required by law for employers to give their workers W-2 forms and pay stubs. State regulations demand pay stubs, and each state has different criteria that need to be met. Others only do so upon request or with the employee's express written approval, while some states demand pay stubs from employers with every paycheck. State-specific requirements for what is needed on a pay stub differ but commonly include the worker's name, the dates of the pay period, the gross wages earned, deductions made, and the net pay.

Federal law specifies that employers are required to give W-2 forms to their staff members by January 31 of each year. A W-2 form details annual tax withholdings and an employee's total earnings. Employers are required to give a copy of the W-2 form to the Social Security Administration (SSA). Employers are penalized for failing to provide pay stubs or W-2 forms. Employers who do not give workers pay stubs risk fines and other consequences. Employers get penalized for failing to provide W-2 forms, and employees face delays in filing their tax returns and getting the tax refunds they are due.

Both employers and workers are aware of the legal conditions related to pay stubs and W-2 forms to maintain adherence to the law and control any potential penalties

Employers are not necessary to give pay stubs if they work for themselves. Keeping track of their income and expenses is still a wise habit for tax and financial reasons. They follow the revenues using additional papers besides pay stubs, such as invoices or receipts. They prepare an invoice or receipt for the documents as soon as they are paid for the services and enter the payment into the accounting software.

Employers observe the worker's income and the company's expenses in addition to the former. It covers the costs of materials, tools, rent, and utilities. They cut the taxable income and tax liability by keeping track of the expenses.

Employers incorporate self-employment income on the tax return when it is time to file the taxes. They do it by using Schedule C, which is used to report revenue and expenses for a sole proprietorship, and attaching it to IRS Form 1040. Self-employment taxes, which cover the employer and employee portions of Social Security and Medicare taxes, are necessary to be settled. Work with a tax expert to guide the company through the complexities of self-employment taxes and ensure that they adhere to all relevant tax rules.

Is Pay Stubs Considered as Payroll Summary?

Payroll summaries and pay stubs are not the same.

An employee gets a pay stub, known as a payslip, from their employer that defines their pay for a specific term, plus gross pay, deductions, and net pay. The hours worked, pay rate, and any overtime or bonuses earned during the salary period are all listed on pay stubs. A payroll summary, on the other hand, is a report that offers a broad overview of all payroll transactions for a given period, usually a month or a year. It lists the totals for all workers' gross pay, deductions, and net compensation. A payroll overview points out the taxes withheld, retirement fund contributions, and extra deductions.

A payroll overview benefits employers by ensuring that they comply with payroll-related tax and legal laws, and it is being used to generate financial statements and reports. It is crucial to preserve accurate payroll records and ensure that all payroll-related expenses are properly accounted for and declared to the necessary authorities. Both of them have details regarding an employee's salary, but a pay stub is a complete narrative of the employee's pay for a specific duration, whereas a payroll summary is an overview of all payroll activities for the period.

Can Self-Employed have Pay Stubs and W-2 Forms?

Self-employed people typically do not get pay stubs or a W-2 form as they are not business workers. It is their responsibility to track their income and expenses and to submit the report on their tax forms. They need to get 1099 forms from customers who have paid them for their services; the forms detail the money they made from the customers over the year.

Self-employed individuals are not considered employees and do not receive a W-2 form. They are responsible for reporting the income on the tax return using Schedule C or Schedule C-EZ. Self-employed people sometimes want to create pay stubs for their records or their clients or customers. Creating pay stubs helps them keep track of their income, deductions, and taxes, and helps them demonstrate their income to third parties, such as lenders or landlords. They use accounting software, such as QuickBooks or FreshBooks, or they create a template in a spreadsheet program like Microsoft Excel or Google Sheets.

A self-employed person, however, gets pay stubs and a W-2 form from their employer if they simultaneously work a full- or part-time job as an employee. Pay stubs and W-2 forms only apply to their income as an employee in such a situation; they do not apply to their income from self-employment. There are no pay stubs for self-employed unless they are a worker too.