Many people keep paperwork that no longer serves a purpose outside of taking up space. Workers' pay stubs seem like very important documents. They contain important financial data, but once you get an accurate Form W-2 from your employer, you pay stubs are no longer important because all the financial data is summarized on the Form W-2.
A Form W-2, Wage and Tax Statement, summarizes the money you made from a specific employer from January 1 to December 31 of the previous year. Keep your pay stubs until you get your Form W-2. Dispose of your pay stubs after you verify the accuracy of each figure that appears on your Form W-2.
An efficient way to verify the accuracy of the Form W-2 is by creating a spreadsheet to track your pay periods throughout the year. Starting with column B, label each column with a number and description from the Form W-2. For example, in cell B1, type “1. Wages, tips, other compensation”. Include a label for each box from your Form W-2 that contain data. Label column A, “Pay Date”. In each row in column A, enter the pay date and fill in the financial data in the other columns from that pay stub. Do this for each pay stub from the year covered by the Form W-2. After entering all the pay stub data, label the last row “Total”. The spreadsheet calculates the data in each column. Each total should match the amount in the corresponding box from Form W-2. If you do not feel comfortable letting go of your pay stub details, store a one-page copy of your verification spreadsheet with your taxes because it is a breakdown by pay period everything summarized on the Form W-2.
If one of the totals do not match the Form W-2, review your figures again for accuracy. If all the totals are lower than the figures on the Form W-2, it is possible that you skipped a pay stub. If all the totals are higher than the figures on the W-2, it is possible that you added a pay stub dated outside of the range of the Form W-2. If you did everything correctly, contact your payroll department and ask for a correct Form W-2. When you receive a correct Form W-2, you can discard your old pay stub.
It is unlikely that there is anything on your pay stub that would allow someone to steal your identity, but the pay stub does contain sensitive information. The pay stub shows either your hourly pay rate or your salary, your year-to-date earnings, where you work and benefit deductions. That is a lot of information that can potentially end up in the hands of a stranger. To preserve your privacy, dispose of your pay stubs by shredding them.
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