When you’re a self-employed individual it’s tough to juggle around with your paperwork. Unlike the fixed salaried employees, you won’t be receiving a online pay stubs which will be listing down your earnings and deductions.
So, you might be wondering that does a thing like independent contractor pay stub exists? What if you need to show a proof of your earning when you buy a car, house? Read this blog to understand if you’re facing the same situation of being an independent contractor.
Employee or Independent Contractor Pay Stub?
Firstly, let’s clear the difference between an employee and an independent contractor.
If you are an employee you will be doing the following set of things:
- Working for a set of fixed hours
- Taxes deducted from your pay check
- Receive training from your company
- Manager shall be assigning you the work
- You’re being provided with the resources you need to do your job
- Work only for a single employer
- Enjoy benefits like: health insurance, sick leave
Indepdent Contractor will be doing the following set of things:
- Manage their own schedule
- Responsible for their own taxes
- Grab their own resources
- Can refuse to work with others
- Use their own training for their work
- Can work for more than one client
- Do not enjoy any other benefit other than their pay check
W-2 or 1099?
Look if you;re still erratic you can go through your paperworks once again. At the end of the year, which tax form do you obtain for your work?
A W-2 form is a form which is given to the employees by the company for which they work. It showcases an employee’s annual pay and includes all the details about hidden tax deductions, holiday pay and health insurance.
A 1099 form is the perfect form for independent contractors. As it only lists down the total earnings you have received during a year without any withholdings.
Does a 1099 form gets counted as an independent contractor pay stub? In reality, No it doesn’t. However you can use this information from your 1099 form to generate your own pay stub.
Creating Independent Contractor Pay Stub:
As you’re a self employed individual and is not receiving a pay stub, that’s okay. You can always use a free tool to generate your pay stub. Just follow the below mentioned steps:
- Define your state of residence
- Define whether the pay stub is for yourself or employee
- Fill in your personal information
- Fill in your company details
- Fill out the additional fields
- Add if any deductions are made
Once you submit this information and have selected your desired template, your work is done! An easy to use online pay stub allows you to print as well as download your independent contractor pay stub.
Exploring the universe of income, taxes and paycheck stubs is not an easy task. Now all is clear to you about independent contractor pay stub and also the difference between an employee and an independent contractor, you will be confident and prepared for the next tax season.