Pay stubs contain information about the compensation you have got from your employer for the services you rendered during a period. The pay stub serves a variety of purposes other than just intimating you about the amount of money you are drawing as a salary. The law mandates employers to provide pay stubs to their employees, containing details of the payments made to employees. You should keep those pay stubs in your record as you might need them in many situations. In this article, we will discuss 7 things for which you need a pay stub.

1- Filing Tax Returns

While filing your income tax returns, you will need your pay stubs to easily calculate the amount of tax you owe on the amount you earned as salary. Your pay stub may also contain some deductions such as withholding tax and contributions to a pension fund that can influence your taxable amount. Having a complete record of your pay stubs will help you determine your taxable income accurately without sifting through your bank statements.

2- Applying for Credit Card

Credit card issuers check your pay stubs to determine your income and provide a credit limit to you on your credit card. Usually, credit card issuers will ask you to provide pay stubs for the past 6 to 12 months to confirm that your income is stable and that you will be comfortable with the credit limit provided to you. 

The credit card company will also examine your bank statement for the past 12 months to work out your expenses and your rate of savings. However, you must have your pay stubs if you want to have your credit card application approved.

3- Renting

Most landlords ask for pay stubs before renting out their properties to tenants. The pay stubs help landlords confirm the source of income of their tenants, verify the employment, and confirm the stability of the tenants’ income to pay the monthly rent, reducing the risk of the landlord. The process of renting a property can become a lot easier if you are able to provide your pay stubs to the landlord.  

4- Taking a loan

Lenders require many documents, including a pay stub or any other document that can serve as proof of your income. If you need to take a car loan or a cash advance, you will have to provide your most recent pay stubs to the lender to show your creditworthiness. Without the pay stubs, the lender will not be able to verify your employment and your ability to repay the loan which might disqualify your loan application. If you want to have your loan application approved, you must keep your pay stubs ready for lenders to verify your income.

5- Reconciling Irregular Payments

If you receive an irregular payment in your bank account, you can reconcile it with your pay stub to find out the discrepancy. Your employer might have deducted an excess amount or paid a bonus or overtime payment to you, which might have resulted in irregular payment in your bank account. 

 Your pay stub will allow you to determine the details of the payment received in your bank account, helping you clarify the ambiguity and reconcile irregular payments. 

6- Track your deductions and contributions

Your pay stub contains detailed information about the composition of your gross salary and deductions and contributions thereof. Deductions from your gross salary and contributions to various heads are mentioned in the pay stub, allowing you to track the total contributions and deductions you make each month from your salary.

Many employers include a running balance of the pension or provident fund on their pay stubs, which facilitates employees to monitor the real balance in their pension or provident fund accounts. Some employers also provide employees an option to withdraw a portion of their provident fund, depending on local rules and regulations. 

7- Insurance compensation

If you have acquired an insurance policy that allows you to get pay protection in case of disability, you will need your pay stub to claim disability insurance compensation for your insurance company. The insurance company will ask you to submit your most recent pay stub as proof of your income and will most likely provide you with the monthly salary mentioned in your pay stub in the event of the disability insurance claim.



Pay stub is an important document that you must keep in safe custody. Many employers now provide electronic pay stubs to their employees, so you can also store them electronically on your computer or cloud storage. You can also keep hard copies of the electronic pay stubs and submit them where required. 

Pay stubs act as proof of income and can help you in filing your tax returns, applying for credit cards, renting an apartment or property, taking a loan, and reconciling your payments. Not only do pay stubs facilitate you in acquiring loans and different services, but you also get details about your contributions and deductions from your salary to pension funds. Therefore, it is important to keep your pay stubs ready as you might need them in many situations.