The difference between a check and a check stub can be confusing at times, especially if you are just starting out in the world of banking or have a first time job. Most often, employers who write or print checks will submit both the check and the check stub to explain to the employee how final pay is calculated. However, there are instances where payment is made by check and no stub is attached, which is often the case with contractors or independent workers. In contrast, those who are paid via direct deposit can only receive a check stub as proof of payment.
What is a check?
According to the Princeton.edu website, a check is “a written order instructing a bank to pay money”. When a person receives a check as payment, it gives them bank authorization to receive the full amount of the check drawn from the check drawer’s account. If funds are not available (insufficient), then no funds are disbursed. As a legally binding document, a check can be used in court as a contract between the writer and its payee.
What information does a check contain?
There are three types of information located on a check – payee information, payee information and bank information. Payees will receive their full legal name, the amount they are being paid on the check, in both numeric and standard digit form. Traditionally the writer’s contact information is also on the check, including their name (or company name), address, and contact phone number. Bank information including the bank’s routing number and the author’s account number. In addition, the logo of some banks may be prominently displayed.
What are the most common uses of cheques?
Checks are most commonly used in exchange for goods or services. They represent legal tender and provide functionality similar to currency.
What is a check stub?
A check stub is a record detailing the information contained on a check. Since the check is deposited in the bank against its cash value, no proof of the transaction is retained by the person(s) who cash the cheque. Therefore, stubs are traditionally retained by the payee of the check as a receipt.
What information does a check stub contain?
Check stubs come in many forms like pay check stubs Those are used in payroll or business stubs that are given to contractors. The most common information contained on a check stub includes the payee’s name and account identifying information (employee number, last four digits of a Social Security number, etc.), check writer’s business information (name, address, etc.), check amount . , and an analysis of how the final value of the check was calculated (deductions, fees, etc.). On some check stubs (especially payroll records), a history of payments may exist over a time period.
wThe most common use of cap check stubs is?
Often check stubs are used by the payee as proof of earnings. As a legal record of payment, these documents verify the amount that was received and are often used to report proof of income.