Why keep pay stubs

While a few statements will work, a pay stub is the most common source of income verification. If you are applying for a loan or line of credit with a bank, or you have been asked to produce your pay stub to verify your salary during an employment negotiation, you will want quick access to your pay statements.

Further, pay stubs help you track your taxes and deductions. You should know exactly where all of your money is going at all times. How long you should keep your pay stubs or not differs according to whether you are an employer or employee. Here is how long to keep pay stubs in each instance. Employers should be very cautious when it comes to holding onto financial records of employees. You need to make sure that your company is following all relevant federal, state, and local labor regulations.

It is always better to be safe with record keeping. Your organization can keep these records longer than the three years, but it helps file management if you have a determined date at which you will shred the statements. And like any important financial statement, you should always shred pay stubs. One of the great things about digital pay stubs is that they are very easy to store and sort through. You can keep this information safe — indefinitely — without clogging up your workplace.

As an employee, can you shred your pay stubs? As a general rule, American workers should keep their pay stubs for at least one year. You should not shred your old pay stubs until you have received your W-2 form for the year.

You also need to make sure that you have been placed in the right tax bracket in case the IRS comes calling one day. Finally, checking your paycheck statement is important for budgeting. You need to make sure that the amount you allocate for groceries and everyday spending fits in with the amount that is in your paycheck. If you are interested in reading more about your paycheck statement or reading a paystub, be sure to check out the rest of our site.

Recent Articles Shown below are the most recent articles from across the website. Dental Design Products. Join our newsletter Sign up to our newsletter and keep up to date on the latest happenings in the UK electrical sector. Filing Your Taxes You may think a pay stub is only important to keep tabs on your paychecks. Identity Verification Purposes When you open a bank account, your financial institution will request documents to verify your identity. Keeping Track of the Hours You Work If your employer pays you per hour, every pay stub will detail how many hours you worked in that pay period.

Get Ready for Any Tax Audit Maintaining accurate financial records is vital to protect yourself during a tax audit. Proof of Income Obtaining financing and applying to lease a property are examples of situations when lenders and other parties may request proof of income.

Add Your Comment Cancel reply You must be logged in to post a comment. Log In. Create New Account. Having paperless statements and documents can help reduce the risk of identity theft posed by lost or stolen mail. The material provided on this website is for informational use only and is not intended for financial, tax or investment advice. Please also note that such material is not updated regularly and that some of the information may not therefore be current.

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