How to Create a Self-Employed Paycheck Stub

There’s a good chance you’ve heard of paystubs, but how do you make one?

Paystubs have been used for years as they outline how much someone has earned from work. They typically come with other documents, but they’re what most people use when it comes to managing finances and applying for loans.

If you’re self-employed, you won’t be given a paystub like you would from an employer. Making a self-employed paycheck stub can be done in various ways and the process doesn’t take long. Providing that you have a recent check or bank statement, you can start making them.

Keep on reading to learn how to make self-employed paystubs!

What Are Pay Stubs?

When applying for things like loans, you’ll need to bring documents that prove your income. Proof of income comes in many forms, but pay stubs happen to be some of the most common documents. They’re often provided by employers, but those that are self-employed will need to make them.

Aside from being proof of income, pay stubs can be used for general record-keeping. They show how much income you’ve earned along with any deductions and additions. Whenever you apply for a loan, you can bring pay stubs with you to increase the likelihood that you’re approved.

Here are some common loans that require proof of income:

• Mortgage
• Auto loan
• Credit card

If you were employed by a business, you’d receive a paystub with each paycheck. When working remotely, you’ll need to resort to pay stubs and bank statements because you’ll most likely be receiving direct deposit.

When it comes time to file taxes, you can use pay stubs to properly fill in your tax forms. Unlike checks and bank statements, pay stubs will show extensive information about where your money went. Several deductions come from Social Security, local and state tax, insurance, etc.

How to Make a Self-Employed Paycheck Stub

Understanding how to make a pay stub when self-employed will make the tax filing process simpler and you’ll be able to efficiently manage your finances. Depending on the kind of work you do, pay stubs will act as receipts.

Employers typically provide their employees with pay stubs every pay period. However, if you work on projects, you’ll want to make a pay stub for each one. If you’ve taken up a job that will last several months, you can make a pay stub every few weeks.

Making a pay stub is as simple as using a program, whether it’s online or installed on your computer. You’ll need something that allows you to make a Spreadsheet. Some of the most common are Google Spreadsheets and Microsoft Excel. With a spreadsheet program, you can make a template for future use.

Before you can make a pay stub, you’ll need to figure out how much income you make and how much is deducted. On your program, make several columns so that you can outline your gross pay, deductions, and net pay.

Gross Pay

Gross pay is how much you earn each pay period. This number may be complicated when self-employed, but you’ll need to divide your annual pay by the number of times you’ve been paid. Unless you have a steady stream of several payments, this number may be large.

If you’ve earned $100,000 in a year but have only been paid 3 times, your gross pay would be around $33,333. If you’ve been paid 12 times, the gross pay would be $8,333.

Deductions

A deduction is anything that’s automatically taken from your income. Like previously mentioned, Social Security and taxes are some of the most common deductions. Those that are self-employed will need to figure out these numbers themselves because they aren’t getting paid from an employer that sends the money.

You can use the IRS Employer’s Tax Guide to determine how much you should set aside for taxes. Ensure that you look into your state’s laws because you may not have to pay local taxes.

If you’re married or are the head of the household, the amount that you’ll have to deduct will vary.

Net Pay

After making deductions, your final number will be the net pay. Net pay is the total amount that you’ll actually receive when being paid. To come up with the net pay, you’ll need to subtract the deductions from your gross pay. So if your gross pay is $8,000, you may only receive $7,000 after deductions.

Using a Pay Stub Maker

Although you can use spreadsheet software to produce a pay stub, using an automatic paystub maker allows you to make them without worrying about formatting. Paystub makers have various templates depending on what you need.

When using one, you can insert all of your information and get a high-quality pay stub. In many cases, using one of these will be better than making one in a spreadsheet program, because you won’t miss out on any important information.

Start Making Pay Stubs Today

Making a self-employed paycheck stub isn’t as difficult as many people make it out to be. While many numbers are involved, you can quickly produce one by looking into how much you need to deduct. You’ll already know your gross pay, so you’ll need to calculate the deductions and net pay.

Start making pay stubs by using a spreadsheet program or a paystub maker on the internet. No matter which option you choose, you’ll provide yourself with something that can legally be used as proof of income.

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