Proof of Income Explained: What Is It and When Do You Need It?


Over 157 million Americans earn an income. This is obviously what pays the rent and puts food on the table. But for some lucky people, their income can also open the door to other opportunities, such as apartment rentals, car purchases, and even house purchases.

Of course, all this isn’t possible with some kind of reassurance for lenders. Not only do they look at your credit score, but they’ll also want proof that you’re earning a decent and steady income. In other words, they’ll ask for “proof of income.”

What exactly is this? And What can you use for income verification?

In this article, we’ll discuss what proof of income is, why you need it, and what can be used as such.

What Is Proof of Income?

First of all, what is “proof of income” exactly? You may have already guessed that it’s something you can use to show someone that you’re making some money and putting it in the bank.

However, there are certain documents that people will and will not accept. This is because some are harder than others to forge. When you’re doing something like renting a place or borrowing money, then it stands to reason that there will be some dishonest people who will try and get ahead with fake documents.

So make sure you submit proper proof of income so you don’t hit any roadblocks. Also, be aware that most places will ask for at least 2 documents for proving income, so pick 2 of the best ones for you from a later section in this article.

Why Do You Need Proof of Income?

You now know what proof of income is. But why would you need it?

Generally, you’ll need to give proof of employment or income if you need financing or housing. This is because the other party takes on a huge risk by trusting you. So they’ll need some evidence that you won’t run out on them for repayment or end up squatting on their property.

So if you apply for an auto loan, personal loan, mortgage, or any other type of loan, expect most lenders to ask for proof of income.

Also, if you’re renting an apartment, then the landlord will want to see proof of income as well. Not only does this prove you can pay the rent, but it also indicates that you’ll be responsible with their property and not trash the place.

What Can Be Used as Proof of Income?

So what can you use as proof of income when applying for a loan or apartment? Here are some of the commonly accepted documents.

Pay Stub

The easiest way to show your proof of income is to hand over your pay stubs. Nowadays you can easily create a proof of income using a payslips generator. As a rule of thumb, you should be keeping the last 1 or 2 years’ worth of pay stubs around. This is so if anything’s wrong with your tax returns, you can dig out those stubs to dispute the discrepancies.

However, as you can imagine, keeping that many pay stubs around will take up a lot of space. Not to mention, it’d be hard to find a particular one if needed as well. If you get paid every 2 weeks, that’s 52 pay stubs to sort out if you’ve kept 2 years’ worth of them.

A great way to streamline this is to use a paycheck stub template. Basically, you’d input everything onto the template and save all your information online and/or on your computer. Then, you can say goodbye to the official pay stubs and you’d practically never lose the digital copies, especially if you’ve backed them up.

Of course, not a lot of places will accept this as an official document for proof of income, so be prepared to use this in combination with another method on this list if you decide to go the digital pay stub route. Otherwise, you can just submit the original paper ones if you still have them.


Your employer has to file a W-2 for every employee. If you’re working above board and they’re doing everything by the books, then it should be very easy to ask for your W-2. In fact, they’re supposed to give you one every year.

The only downside is you only get this once a year, which means it’s very easy to misplace. So make sure you store your W-2s somewhere safe!

Tax Returns

Your tax returns are also a great way to show proof of income. Since it’s an official document from the IRS, then most places should accept this, if not all.

The only problem is it reports the money you made a year before, not the current one. So you’ll most likely have to submit another document to show your present income.

Letter From Your Employer

A letter from your employer can be a great 2nd document for proof of income. Make sure they write the letter on a paper with their business’s proper letterhead and that they list your full name, position, and salary that you make.

You can also turn this into a reference letter, as your employer can also give a testimonial about your character in the letter. Kill 2 birds with 1 stone!

Achieve Your Milestones With Proper Proof of Income

Now you know what proof of income is, as well as what it’s used for and what documents are valid. If you’ve been saving up and wanting to take the next step in life, you’re better prepared for it now.

When you walk into your appointment with the proper documents in hand, you’re sure to wow the landlord or lender. So pull together your documents so you’re ready for whatever’s coming up next for you!

Did you learn a lot with this article on verification of income? Then keep browsing our blog page, as we have tons of other posts that are informative!

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