The difference between a check and a check stub
The difference between a check and a pay stub can sometimes be confusing, especially if you are just starting out in the world of banking or if you are working for the first time. Most of the time, employers who write or print checks will send both a check and a pay stub to the employee to explain how the final pay was calculated. However, there are cases where payment is made by check and no stub is attached, which is usually the case for contractors or freelancers. Conversely, those who pay through direct deposit can only receive the check stub as proof of payment.
What is a check?
According to the Princeton.edu website, a check is “a written order directing a bank to pay money.” When a person receives a check as payment, they provide a bank authorization for them to receive the full amount of the check, which is taken from the check provider’s account. If the funds are not available (insufficient), then the funds are not dispersed. As a legally binding document, checks can be used in court as a contract between the issuer and the recipient.
What information does a check contain?
Checks contain three types of information: recipient information, vendor information, and bank information. Recipients will find their full legal name, the amount paid to them on the check in standard numeric and numerical form. Traditionally, the writer’s contact information is also on the check, to include their name (or company name), address, and contact phone number. Bank information including the bank routing number and the writer’s account number. Also, some banks may have a prominent logo.
What are the most common uses of checks?
Checks are most often used in exchange for a good or service. They represent legal tender and have the same functionality as currency.
What is a check stub?
A check stub is a record that details the information contained in a check. Since checks are sent to the bank for their cash value, the people who cash the check do not keep any proof of the transaction. Therefore, the recipient of the check traditionally keeps the stubs as a receipt.
What information does a check stub contain?
Check stubs come in a variety of forms, such as paycheck stubs that are used on payroll or business stubs that are issued to contractors. The most common information on the check stub includes the recipient’s name and account identification information (employee number, the last four digits of the social security number, etc.), the business information of the check issuer ( name, address, etc.), the amount of the check. and a breakdown of how the final value of the check was calculated (deductions, fees, etc.). On some pay stubs (especially those payroll records), there may be a history of payments over a period of time.
WWhat are the most common uses for check stubs?
Most of the time, check stubs are used as proof of income by the recipient. As a legal record of payment, these documents verify the amount that was received and are most often used to report proof of income.