The difference between a check and a check stub can sometimes become confusing, especially if you’re just starting out in banking or working for the first time. In most cases, employers who write or print checks will send a check and pay stub to the employee to explain how the final pay was calculated. However, there are cases where a payment is made by check and no stub is attached, which is usually the case for contractors or freelancers. Vice versa, those who are paid through direct deposits 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, he provides a bank authorization for him to receive the full amount of the check, which is taken from the check provider’s account. If there are no funds available (insufficient), then no funds are distributed. 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?
Three types of information are found on checks: recipient information, supplier information, and bank information. Recipients will find their full legal name, the amount being paid to them on the check in standard numeric and numeric form. Traditionally, the writer’s contact information is also found on the check, to include her name (or company name), address, and contact phone number. Banking information including the bank routing number and issuer account number. Also, some banks may have a prominent logo.
What are the most common uses of checks?
Checks are most commonly 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 on a check. Since checks are sent to the bank for their cash value, the person(s) cashing the check does not retain any proof of the transaction. Therefore, the check recipient traditionally retains the stubs as a receipt.
What information does a check stub contain?
Paycheck stubs come in a variety of forms, such as paycheck stubs used on payroll or business stubs given to contractors. The most common information contained on the check stub includes the recipient’s name and account identification information (employee number, last four digits of social security number, etc.), the check issuer’s business information (name , address, etc.), the amount of the check, and a breakdown of how the final value of the check was calculated (withholdings, fees, etc.). On some check stubs (especially payroll records), a history of payments over a period of time may be present.
WWhat are the most common uses of 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 received and are most often used to report proof of income.