The Complete Guide to Generating an Independent Contractor Pay Stub
There are many benefits to being self-employed. But there are also a few challenges that traditional employees don’t experience. One of these challenges is keeping accurate records of your income to submit tax returns to the Internal Revenue Service (IRS). Luckily, the process of generating an independent contractor pay stub and 1099 pay stub documents doesn’t have to be complicated.
In this article we’ll discuss pay stubs, why they are necessary for independent contractors, and how to create pay stubs online.
Key Takeaways:
- Pay stubs are records of employee compensation that outline earnings and deductions. Employers usually provide pay stubs on a weekly or monthly basis.
- Independent contractors tend to be self-employed, which means they don’t receive pay stubs from a formal employer.
- 1099 pay stub templates can be used as proof of income and stable employment when you want to apply for a loan or rent a property.
- Pay stubs can also help independent contractors keep track of how much their clients have paid them—essential information that you’ll need for filing your tax returns.
- There are many online tools, like FormPros, that can help you generate 1099 paystub documents as an independent contractor.
Formal Employees -vs- Independent Contractors
Millions of workers are incorrectly classified as independent contractors each year. This simple mistake costs government agencies billions of dollars to fix. It also denies workers compensation for overtime, minimum-wage, and medical and family leave.
Before you make a similar mistake, let’s take a closer look at what the key differences are between employees and independent contractors.
| Employees | Independent Contractors |
| Usually work a fixed number of hours | Define their own work schedules and hours |
| Have their taxes deducted from their income by their employers’ | Self-employed people take responsibility for their own taxes |
| Work for a single company | Typically work for more than one company |
| Receive various sick leave, health and unemployment benefits | Do not receive any employment benefits other than wages |
By definition, independent contractors are not formally employed by a particular company. This means that they do not receive pay stubs from an employer and have to make their own using an independent contractor pay stub template.
What is a PayStub?
A paystub is a formal record of a person’s compensation. It outlines all of their earnings and taxable deductions for a specific pay period.
We’ll show you how to complete a 1099 pay stub template in more detail later in this article.
A pay stub generally reports the following information:
- The independent contractor’s personal details, including their full name, postal address and Social Security number (SSN).
- The full name and address of the client that the work was completed for.
- The number of hours worked.
- Gross pay before deductions.
- Federal, state and local tax withholdings.
- Net pay after deductions.
Although paystub laws differ from state to state, many formal institutions require copies of these documents as proof of income and stable employment.
Why Would an Independent Contractor Need Pay Stubs?
Pay Stubs Help You Keep Track of Your Earnings
The main benefit of using pay stubs as an independent contractor is that they help keep track of how much your clients have paid you over a specific period of time. You’ll need this information when you fill out your 1099-NEC tax form at the end of the year.
The 1099-NEC is the official tax return that independent contractors have to file with the IRS. This tax document reports your total income and the amount of federal and state income taxes withheld from your earnings.
Having up-to-date pay stubs on hand can help you find payment records when you need to fill out tax forms at the end of the year.
*Remember, your pay stub information should match the data on your 1099-NEC.*
Pay Stubs Provide Proof of Income and Employment
If you’re applying for a loan, renting, or buying a property, you’ll need to provide proof of income.
Lenders, landlords, and businesses typically require verification of stable income and employment before approving credit or rental agreements.
As an independent contractor, pay stubs serve as valuable proof of your earnings. They demonstrate your ability to meet financial obligations, such as loan repayments or rent, increasing your chances of approval.
How to Complete an Independent Contractor Pay Stub Template
As an independent contractor, you don’t receive traditional pay stubs from an employer—but that doesn’t mean you don’t need them. Whether for proof of income, tax purposes, or client invoicing, creating your own pay stubs is essential.
With FormPros, you can generate professional pay stubs in just a few minutes. Below, we’ll walk you through the key details you’ll need to include when using our online pay stub generator.
Step 1: Enter Your Personal Information
Start by providing your full name and postal address, including your state and ZIP code.
Additionally, you may need to include your Social Security Number (SSN) or Contractor ID if applicable. These identifiers help with tax reporting and financial verification.
Step 2: Define Payment Periods and Dates
The pay period represents the timeframe during which you worked and earned income. For example, if you performed services between December 8th, 2025, and December 14th, 2025, this would be your pay period.
Independent contractors typically set pay periods as:
- Weekly
- Bi-weekly
- Semi-monthly
- Monthly
It’s important to choose a pay period that aligns with your work structure and complies with any state labor laws governing contractor payments.
The pay date, on the other hand, refers to the specific day your client is expected to compensate you for your services. You’ll also need to indicate whether you are paid on an hourly or salary basis.
- If hourly, specify your hourly rate and total hours worked during the pay period.
- If salaried, enter your fixed earnings for the specified period.
Step 3: List Your Deductions (If Applicable)
If you’re creating paystubs for personal financial tracking or tax filing, FormPros can automatically calculate your tax deductions.
Under Statutory Deductions, you can list:
- Medicare Tax
- Social Security (FICA) Tax
- Federal and State Income Taxes
However, if you’re using the pay stub for client invoicing, you can skip this section, as independent contractors are typically responsible for their own tax withholdings.
Step 4: Calculate Your Net Pay
Once you’ve entered your earnings and deductions, FormPros will automatically compute your net pay—the amount you take home after all applicable taxes and deductions have been applied.
With these steps completed, you’ll have a professional, accurate pay stub that can be used for record-keeping, loan applications, rental agreements, and more.
Common Mistakes to Avoid
When generating a pay stub, accuracy and proper record-keeping are essential. Small errors can lead to financial discrepancies, tax issues, and difficulties when verifying your income. Here are some common mistakes to watch out for—and how to avoid them.
1) Providing Incorrect Information
One of the most frequent mistakes is failing to enter accurate details on your pay stub. This can happen when:
- Pay period dates are omitted or incorrect.
- Earnings, hours worked, or payment calculations are misreported.
- Deductions for taxes or other withholdings are miscalculated.
These mistakes can cause issues when filing your 1099-NEC at the end of the tax year, as you may have to recalculate and reconcile your income totals, leading to unnecessary stress and potential IRS scrutiny. Always double-check your entries before finalizing your pay stub.
2) Using Outdated or Incorrect Tax Data
Tax laws frequently change, and failing to use current tax rates can result in inaccurate calculations. Common errors include:
- Using outdated federal or state tax rates when calculating deductions.
- Applying the wrong Social Security and Medicare (FICA) tax percentages.
- Forgetting to account for state-specific tax requirements.
Incorrect tax deductions don’t just affect your paystubs—they can also lead to errors on tax filings, requiring costly corrections and possibly resulting in IRS penalties. To avoid this, stay informed about tax updates or use a reliable pay stub generator that applies the latest tax rates automatically.
3) Failing to Keep Pay Stub Records
Many independent contractors don’t maintain proper records of their pay stubs after creating them. This can cause serious issues when:
- Applying for a loan, mortgage, or rental property—since lenders and landlords require proof of income.
- Filing taxes—as accurate financial records help ensure proper reporting and avoid IRS audits.
- Tracking business income—for budgeting, expense management, and tax deductions.
To prevent loss of important documents, we recommend:
- Using a pay stub generator with record-keeping features to store and organize your pay history.
- Saving digital copies of your pay stubs on your computer, cloud storage, or external hard drive.
- Keeping physical copies in a secure folder for quick access when needed.
Create Flawless Pay Stubs Every Time
At FormPros, we understand that independent contractors need a simple, hassle-free way to manage their independent contractor payroll—without wasting time on complicated calculations or manual paperwork. That’s why we’ve built an automated, user-friendly, and efficient pay stub generator designed to streamline the process.
Just enter a few basic details about your business, and our system will guide you through a quick set of questions about your earnings and pay dates. Within minutes, our platform will automatically calculate your taxable deductions, ensuring accuracy and compliance with the latest tax rates.
The best part? FormPros is a cost-effective alternative to hiring an accountant or payroll service—giving you professional, reliable pay stubs at a fraction of the cost. Try FormPros today and experience just how easy it is to generate accurate, professional pay stubs in minutes!
FormPros Has You Covered
Simplify your paperwork with FormPros! From creating paystubs, W-2s, and 1099-NEC forms to generating LLC Operating Agreements and even voided checks, our easy-to-use platform has you covered. Save time, reduce errors, and handle your business documents with confidence. Start now and see how FormPros makes professional form generation fast, affordable, and hassle-free!
