Self-employed people are often confused on how to make pay stubs. The process is simple. However, the first time may be a bit daunting. To help you get started, this article contains all the step by step guides on how to make pay stubs for the self employed.
Pay stubs are the fundamental part of any organization. They are used as proof of income for self-employed and regular employees to verify their income for a home, car or loan application.
Table of Contents
What are Pay Stubs?
The pay stub is a document that contains the summary of all the earnings and deductions made to an individual by the employer. It gives brief details on:
- Pay Dates
- Net Pay
- Year to Date Earnings
How to Make a Pay Stub for Self Employed
There are two steps to making pay stubs: manually or automated. The easiest is using the automated method of an online Pay Stub Generator.
Pay Stub Generator (Recommended)
An online pay stub generator will take all the payroll data and print a customized paystub instantly. These generators are extremely accurate and easy to use. They also provide you with instant access to your paystub with just one click.
The process is simple:
To use the online pay stub generator, simply enter your personal information such as name, address etc. This information will populate in your pay stub.
You will have the enter in the salary and pay date. And the generator will automatically calculate all the taxes and deductions.
To print your pay stub, you simply click on the “download” icon where you can choose PDF or image format of your paystub.
Self employed people may opt to use an online payroll calculators in order to determine their earnings and taxes. They help the self-employed record all their earnings into an electronic form and calculate all their taxes for them.
The online payroll calculators are helpful, easy to use. It is beneficial for individuals who do not have an accounting background. And it helps prevent mistakes when making pay stubs, especially for self employed.
There is usually a small fee for making pay stubs. However, it does save you time. Having extra time is helpful, especially if you have a proof of income deadline approaching.
The following is a great online Pay Stub Generator.
Manually Make a Pay Stub from MS Word
Another method for making pay stubs for self-employed is to make them manually using a word processor such as Microsoft Word. It will take substantially more time and effort in creating a pay stub because you have to calculate the taxes and deductions manual.
It is a process that consists generally of the following steps:
- Open MS Word
- Create a Table
- Enter the Income
- Calculate all the Taxes based on Income and Pay Period
- Calculate the Year to Date earnings for each line item
- Design the document to look like a pay stub
- Print the Pay Stub
The manual process is quiet time consuming however, it is free. If you do not have the money to afford a payroll calculator, you may want to consider making pay stubs manually.
Another benefit of making pay stubs manually is that it helps to keep track of your finances more carefully.
Making manual pay stubs based on one instance of earnings makes reviewing year to date income very easy. However, a manual system works best when all of an individual’s earnings are from the same source. Check out this article, if you want a more detailed guide on how to make check stubs from scratch.
If you are a self-employed individual and need help creating pay stubs for income, using a pay stub generator will be the easiest way to create them.
It allows you to create pay stubs without accounting knowledge and it saves time by not having to calculate your payroll taxes manually.
These online tools are a great option for any employee who is self-employed, as well as an employee of a company that does not provide pay services for their employees.
If don’t have the money to use a pay stub generator, you still have the option to make pay stubs manually. Regardless method you choose, it is always helpful to consult a CPA or tax expert in your area for your particular needs.