For owners and the self-employed

Pay Stubs for Self-Employed People and Business Owners

If you run your own business, nobody hands you a pay stub, yet landlords, lenders and others still ask for proof of income. Here is how self-employed people, CEOs and small business owners can pay themselves, what taxes still apply, and how a pay stub helps you show your income quickly and clearly.

The short answer

How you pay yourself depends on your business structure. Sole proprietors and single-member LLC owners take an owner’s draw and pay their own taxes. Owners of S and C corporations who work in the business are generally paid a salary through payroll. Either way, a pay stub or earnings statement for each pay period gives you a clear, familiar document that shows what you paid yourself, and it is much faster than piecing together bank statements when someone asks for proof of income.

Create a pay stub for yourself Free paycheck calculator

How business owners pay themselves, by structure

This is general information, not tax advice. Your accountant can confirm what applies to you.

Sole proprietor or single-member LLC

How you are paid: Owner's draw: you move money from the business to yourself. There is no salary and no payroll.
Taxes: You pay self-employment tax and income tax yourself, usually through quarterly estimated payments.
Documents you end up with: Tax return (Schedule C), bank statements, and an earnings statement or pay stub you prepare.

Partnership or multi-member LLC

How you are paid: Draws and guaranteed payments to each partner.
Taxes: Each partner pays self-employment and income tax on their share, usually through estimated payments.
Documents you end up with: Schedule K-1, tax return, bank statements, and a pay stub or earnings statement you prepare.

S corporation

How you are paid: Owners who work in the business are generally paid a reasonable salary through payroll, and can also take distributions.
Taxes: Payroll taxes are withheld from the salary and deposited with the IRS. Distributions are not payroll wages.
Documents you end up with: Real pay stubs from payroll, and a W-2 at year end, plus your tax return.

C corporation

How you are paid: Owner-employees are paid a salary through payroll. Dividends are separate.
Taxes: Payroll taxes are withheld from the salary and deposited with the IRS.
Documents you end up with: Real pay stubs from payroll, and a W-2 at year end.

Do self-employed people and owners need pay stubs?

The law does not require a pay stub when you pay yourself an owner’s draw. The need comes from other people. Landlords, mortgage and auto lenders, credit card issuers, benefit programs and some employers ask for recent pay stubs as a quick way to see steady income. When you have no employer, a pay stub or earnings statement built from your real pay gives them that familiar format, and it takes minutes instead of days.

It also helps you. A stub for each payment turns a pile of transfers into a clear history of what you paid yourself and when, with year-to-date totals that make bookkeeping and tax time easier.

How to pay yourself, step by step

Choose how you will be paid. This follows your business structure: an owner's draw for a sole proprietorship or single-member LLC, or payroll wages for an S or C corporation.
Pick an amount and a schedule. Paying yourself the same amount on a regular schedule, such as every two weeks or monthly, makes your income easy to show and your budget easier to plan.
Set aside money for taxes each time you pay yourself. Many owners put aside a fixed share of each payment into a separate account.
Record every payment, with the date, the amount and what it covered.
Create a pay stub or earnings statement for each pay period, so you have a clear document for every payment you took.
Keep your tax return, bank statements and profit and loss statement together, since lenders and landlords often ask for them alongside pay stubs.

The taxes you still owe as an owner

Owners who are not on payroll do not have taxes withheld, so planning for them is part of paying yourself.

Self-employment tax: 15.3% of net earnings, made up of 12.4% Social Security and 2.9% Medicare, for sole proprietors and partners.
Income tax: federal and, where applicable, state tax on your business profit.
Quarterly estimated payments: generally due April 15, June 15, September 15 and January 15.
S and C corporation owners: payroll taxes must be withheld from your salary and deposited through a real payroll process.

To see how withholding works for an employee paycheck, try the free paycheck calculator.

Show your income with a pay stub in minutes

Open the pay stub generator and choose Employee if you are paid through payroll, or Contractor if you are self-employed.
Enter your business name, your name, your state and the pay period.
Enter the amount you actually paid yourself, and any deductions.
Check the live preview, then pay and download the PDF. Pay stubs start at $4.44.
Repeat for each pay period you need, or make several in one order.

Paying for more than one? See how much you save on pay stubs.

Questions from self-employed people and owners

How should a small business owner pay themselves?

It depends on the business structure. Sole proprietors and single-member LLC owners usually take an owner's draw and pay their own self-employment and income taxes. Partners take draws or guaranteed payments. Owners of S and C corporations who work in the business are generally paid a salary through payroll. A tax professional can confirm the right method for your business.

Can a self-employed person get a pay stub?

Self-employed people are not on an employer's payroll, so no one issues a pay stub automatically. You can create a pay stub or earnings statement from your real income for each pay period, which gives landlords, lenders and others a familiar document that shows what you paid yourself.

Should I pay myself a salary or take owner's draws?

Sole proprietors and single-member LLCs that have not elected corporate tax treatment take draws and cannot put themselves on payroll. Owners of S corporations must generally pay themselves a reasonable salary through payroll for the work they do, and can take additional distributions. Ask a tax professional which applies to you.

What is a reasonable salary for an S corporation owner?

The IRS expects pay that is reasonable for the work you do, roughly what the business would pay someone else for the same role. There is no single formula, so factors like your duties, hours, experience and what similar roles earn matter. A tax professional can help you set it.

How do self-employed people show proof of income?

Common documents are tax returns and Schedule C, bank statements showing deposits, 1099 forms, a profit and loss statement, and pay stubs or an earnings statement for recent pay periods. Lenders and landlords differ in what they require, so ask which they accept.

Do I need pay stubs to get a mortgage if I am self-employed?

Mortgage lenders usually rely mainly on tax returns, often covering about two years, plus other financial documents such as profit and loss statements and bank statements. Pay stubs can supplement these in some cases, but requirements vary by lender, so check with yours.

How often should I pay myself?

Whatever fits your cash flow, but a regular schedule such as every two weeks or monthly works well. A steady pattern is easier to budget around and easier for a landlord or lender to read than irregular lump sums.

How much should I set aside for taxes when I pay myself?

It varies with your income, deductions and state. Many owners set aside roughly a quarter to a third of each payment, but that is only a rule of thumb. Self-employment tax alone is 15.3% of net earnings (12.4% Social Security plus 2.9% Medicare). A tax professional can give a number for your situation.

Does a pay stub I create pay or withhold my taxes?

No. A pay stub made with EasyIncomeDocs is a document based on the numbers you enter. It does not withhold, pay or file any tax. If you run payroll for an S or C corporation, you still need a real payroll process that withholds and deposits taxes.

Will a landlord or lender accept a pay stub I made myself?

Acceptance depends on who is asking. Many accept a self-prepared pay stub or earnings statement alongside tax returns and bank statements, and some require other documents instead. Always ask first, and only provide figures that match your real income.

Show your income faster, with a pay stub you can preview before you pay.

Create your pay stub

This page is general information, not tax, legal or accounting advice. EasyIncomeDocs is not a payroll provider and does not withhold, pay or file taxes. Pay stubs and income documents must reflect real, accurate information and must not be used to misrepresent income to a lender, landlord, government agency or anyone else.