If you are a W9 employee, then you might be wondering how your pay stub work. Here’s what they mean for you and why you should get one if you don’t already.
In 2017, independent contractors made up almost 7 percent of all employment in the United States. And whether a contractor worked for one company or several, they would have been a W9 employee.
While there are plenty of differences between contractors and traditional employees, the average freelancer should get a pay stub.
Keep reading to learn more about who gets this type of document and why it’s so important.
Who Gets a W9 Employee Pay Stub?
A W9 employee will get a pay stub like a traditional employee, but it may look a little different. W9 employee taxes work differently than those of W2 employees.
The biggest difference is that W2 employees don’t have to worry about paying a ton in taxes each year or quarter. Their employer takes the money out for them.
But if you’re a W9 employee, or contractor, you have to pay all of your taxes. If you make enough money from a company, they will have to send you a pay stub showing your earnings.
Multiple groups of people have to pay W9 employee taxes. Consider the following groups to determine if you’re a W9 employee.
You might hear the terms freelancer and independent contractor when talking about service providers. A service provider is anyone who sells their services to companies but isn’t an official part of company payroll.
As a service provider, you work for a company doing one thing. You can offer different services, such as writing, graphic design or photography.
In a lot of cases, companies won’t give you a W2, and you aren’t technically an employee. You’re working as a contractor, and your job is to provide a specialized service.
If you apply to work for a company and they ask you to fill out a W9, you are a W9 employee. Odds are you have more control over your work schedule, but you can usually expect a pay stub at the end of the year.
If you own a business, you should consider how that business employs you. In some cases, you may be a sole proprietor, and you may take all of the business revenue as your personal income.
But you may have a partnership or an LLC, and those business structures can affect your taxes. If this is the case, you should consult with an account about how to pay yourself.
An accountant can help you determine if you should be a W9 employee for your company. If that’s the route you take, you can use a pay stub maker to create your W9 employee stub.
You should consider the benefits of hiring yourself as a W2 vs W9 employee because both have pros and cons. However, you should consider the pay stub for each type of employment.
Why You Need a W9 Pay Stub
A W9 pay stub is the documentation you receive at the end of the year from your employees or clients. Whether you work for one company or dozens, you need a pay stub to help calculate your income.
While W9 employee rights aren’t as universal as for W2 employees, you still deserve a pay stub. You can file your taxes without a pay stub, but it will be more difficult.
Consider a few reasons why you should get a W9 employee pay stub.
Track Your Income
The biggest reason why you should get a W9 pay stub is that it can help you track your income. As a W9 employee, you are technically your own boss.
It’s up to you to track how much you make throughout the year. After your first year of working as a W9 employee, you should start paying your taxes each quarter.
When you work with a W9, your employer will give you all of the money based on your pay rate. They don’t take out any taxes for Social Security or Medicare.
You should consider using an accounting program to track your income. But your pay stub is still helpful for verifying the accuracy of your records.
If a company pays you more than $600 in a year for your services, they need to give you a pay stub. It will come as the Form 1099-MISC, and you can file that form with the rest of your taxes.
File and Pay Your Taxes
When you work for yourself as a W9 employee, you need to make sure you do your taxes correctly. Working for yourself can slightly increase the chances that the IRS will audit you.
It’s nothing to worry about, but you don’t want to risk any issues during an audit. If you have all of your pay stubs from W9 employment, you can make sure that you have the best financial records that you can.
Having the proper information when you file your taxes will also keep you from overpaying. If you wait until the end of the year to pay, you can use your annual income to pay just what you need.
And if you pay your taxes quarterly, you can use your pay stubs to potentially get money back. Or you can make sure that you pay enough at the end of the year.
What Happens If You Don’t Get a Pay Stub?
If you file a W9 with a company when you start with them, you should get a pay stub. However, things happen, and you might not always get the documentation.
The first thing you should do is contact that company and tell them you haven’t received anything. Your pay stub could easily get lost in the mail, or it could be on its way.
If that doesn’t work, you can look at your deposit records and add those up for each employer. It’s not ideal, but you can use that to determine your annual income.
Dealing With Taxes as a W9 Employee
Working as a W9 employee can allow you to work with multiple companies. It can be more flexible than a traditional job, but it does come with some financial complications.
If you work as a freelancer, you can expect a pay stub from your various clients. Then, you can use those records to file your taxes.
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