Can Paystubs Be Used as Proof of Income?

When you apply for a mortgage or to rent an apartment, you’re asked to provide proof of income. The lender or property owner requires applicants to submit verifiable proof of income to assess their risk. Lenders and property owners may also have income requirements in place to assure you can reasonably meet the rent or mortgage payment.

For instance, a monthly income three times higher than the payment amount is standard. You might also see income requirements in the 3.5 to four times higher range. If you’re a W-2 employee, you can use your paystub for proof of income. However, some lenders may require additional documentation, such as tax returns and W-2 forms.

Let’s look at some of the reasons paystubs can and cannot suffice for proof of income.

When Paystubs Work In Your Favor

Depending on your employment status and history, paystubs can satisfy proof of income requirements. Paystubs work best when lenders and creditors need to see evidence of recent earnings and you have a history of steady employment. This form of income verification also works well for individuals with consistent weekly, bi-weekly, or monthly earnings. To streamline this process, consider using a paystub generator, which can help you create accurate and up-to-date paystubs that meet the requirements of lenders and creditors.

You’re a Salaried Employee

Paystubs for employees who work on salary will reflect a more accurate income picture. Since salaried earnings don’t really change from one paycheck to another, creditors see exactly what employees take home each month. That said, some salaried employees earn quarterly or annual bonuses. These may not be reflected in current paystubs.

This is where W-2 forms can provide a more accurate and complete picture of an employee’s earnings. These show an individual’s gross earnings, net pay, and tax-deductible contributions to retirement plans and health savings accounts. Since W-2 forms go into more detail, lenders can better determine whether take-home pay is adequate.

You Started a New Job

Sometimes your tax returns and W-2 forms aren’t going to show what you’re earning now. That’s often the case when you’ve switched careers, returned to the workforce, or received a promotion. Maybe you were working part-time or taking care of an aging relative last year.

Now you’re back in the work game and scored a full-time position. A lender might look at last year’s W-2 and have to turn down your loan application based on what they see. But with a copy of your two most recent paystubs, the lender can mark your application as approved.

Paystubs also benefit individuals who’ve switched from a self-employed to a W-2 employee situation. Independent contractors, freelancers, and business owners often rely on tax forms to show proof of income. But those alone won’t do if they’ve sold their businesses or stopped freelancing. Paystubs accurately reflect their current income.

You Have More Than One Job

Many people have more than one income source. When your earnings come from two (or more) jobs, paystubs show what you take home from each employer. Maybe you work a full-time salaried position at one company and have hourly earnings from a weekend gig.

Whatever the case, lenders can easily verify your combined pay from two (or more) sets of paystubs. Since creditors usually contact employers to confirm active employment and annual or hourly pay, your paystubs give them a starting point. In contrast, a tax form combines all your income from work, business, and investment activities.

With paystubs, creditors can distinguish what portion of that income comes from employment. W-2 forms can help verify this too, but paystubs get the job done if you’ve just started a second (or third) position.

When Paystubs Won’t Suffice

Sometimes paystubs won’t serve as the primary means of income verification. For some workers, recent paystubs don’t provide a complete or accurate picture of their earnings. In addition, underwriting processes for loans like mortgages typically require more than one verification method.

You Work on Commission or Your Pay Varies

If you work in a position that pays a commission, a current paystub may show skewed earnings. During slow or peak periods, you’re probably bringing home more or less than average. Even though your income might be $50,000 for the year, a paystub could only reflect monthly earnings of $1,000.

Lenders will get the wrong impression based on this documentation. They’ll be inclined to think you earn $12,000 a year instead. Showing last year’s W-2 and tax return will better serve the lender’s efforts to verify what you make.

Likewise, part-time hourly workers can have earning fluctuations. They might work 20 hours one week and five the next. A recent paystub may reflect lower-than-average pay. However, by utilizing a W-2 creator, these workers can easily and accurately generate their annual W-2 forms and tax returns. Providing these documents to the lender not only saves time and effort but also ensures that the lender receives a more balanced perspective on their income and tax history.

Your Income Doesn’t Come from Employment

Some of us are lucky enough to live off investments, inheritances, savings, or trust funds. Others operate businesses including rental properties and ventures that pay returns or dividends. In these situations, you won’t have paystubs to provide proof of income.

Instead, you’ll need to supply bank statements and tax returns to show a lender what you make. Your earnings might come in the form of interest payments or annuities. For example, lottery winners can choose to receive an annuity or a lump sum. Financial statements from investment or savings accounts will help verify your income.

You’re Applying for a Mortgage

Mortgage lenders are notorious for wanting several forms of proof. After all, they’re usually underwriting large amounts of money. And even though they hedge some of their risks through interest, the current rate of 30-day delinquencies is at 3.8%.

This rate includes foreclosures, which are time-consuming and expensive for mortgage lenders. Triple-checking an applicant’s income provides additional assurance they won’t default. Be prepared to show W2s, tax forms, paystubs, and financial statements when you apply for a home loan.


Paystubs can provide lenders and creditors with proof of your income. While paystubs show recent earnings, they may not be enough to secure a loan. You should be ready with other means of verification, including tax forms, W2s, and bank statements.