December 11, 2024

What is Proof of Income? Types and How to Get Them

02 - What is proof of income & how can you show it @1.5x

Life is full of applications, from rentals to loans to jobs. And for many of those applications, you need to prove your income to qualify.

Figuring out how to show proof of income can be just as confusing as the original application. Here’s a guide to what proof of income is and some examples of proof of income to help you find these documents stress-free, whether you’re employed, unemployed, or self-employed.

What is proof of income?

Proof of income is any document that verifies an individual's earnings over a period of time. It usually comes from whatever entity you receive payments from, like your employer. For example, a person paid every two weeks could provide their pay stub to prove what they earn in a pay period. And your tax return would show you or your household's income from all sources during the previous year.

For individuals who are unemployed but receive benefits — like unemployment insurance, disability payments, or worker’s compensation — can request forms from whatever entity pays them. These forms, whether they’re from the government or an insurance company, can act as proof of income.

Why is proof of income important?

A proof of income confirms that you have access to enough money to meet a financial obligation. That might mean proving that you earn enough each month to pay rent for an apartment each month or make loan repayments on a set schedule.

Some situations where you may need to provide proof of income include applications for:

Loans
Credit cards
Mortgages
Government assistance programs
Grants
Scholarships
Federal visa programs
Some types of insurance
Financial aid
Certain investment accounts
Bankruptcy
Child support or alimony

Do you always have to provide proof of income?

When you're asked to provide proof of income, you may wonder if it’s legally required. The answer is: It depends. It’s often required when you’re applying for a loan like a mortgage, where the lender wants a guarantee that they can trust you’ll pay them back.

In some situations, like with insurance or rental applications, you may be charged more or denied altogether if you don’t provide this documentation. But you can always ask if it’s required and how not supplying it affects whatever you’re applying for.

How to show proof of income: 10 ways

There are many ways to prove your earnings, whether you're employed, unemployed, or self-employed. Here are 10 proof of income documents you could use:

1. Pay stubs

Pay stubs are the most readily available forms of proof of income for individuals working a traditional job. But pay stubs only show income during a single pay period. If you’re salaried or work consistent hours, one should suffice. If your pay fluctuates, you may be asked to submit more than one pay stub to show income consistency.

2. Bank statements

Bank statements are another easy way to prove your income when requested, as they can show a record of consistent deposits. If you’re providing bank statements, black out sensitive data like your account number and non-relevant transactions.

3. Annual tax returns

Tax returns filed with this IRS often serve as sufficient proof of income because they show an overview of your earnings from the past year.

4. Proof of employment letter

In some situations, a proof of income letter or letter of employment may be requested. Many larger companies allow employees to generate these letters automatically within their HR system, but in other situations, you may have to request one. These letters typically show a person's hire date and their annual salary.

5. W-2 forms

Employers provide W-2 forms to employees annually so they can complete their taxes. These forms show how much an employee earned over the year. For individuals with employment income only, W-2 forms often serve as an acceptable form of proof of income.

6. 1099 forms

Similar to W-2 forms, 1099 forms report self-employed individuals’ annual income from business or contractor activities. If you’re self-employed, this should suffice as proof of income.

7. Profit and loss statements

Self-employed individuals who keep detailed business records may be able to provide business profit and loss statements to requestors.

8. Social Security benefits statement

Retirees and individuals receiving Social Security benefits can provide their benefits statement as proof of income. You might need to request it, so check with your provider.

9. Workers' compensation letter

Individuals receiving workers' compensation can request a letter from the appropriate authority proving proof of income from these benefits.

10. Unemployment benefits or disability insurance statements

Recipients of unemployment, disability insurance, or other forms of government support can request and provide a letter or statement proving their income from these sources.

FAQs

How can I provide proof of income if I'm self-employed?

It's likely that you'll be asked for additional documentation to prove your income when self-employed. You can use tax returns, profit and loss statements, invoices, or bank statements showing regular deposits as a few examples of proof of income.

Do I need to provide proof of income for every type of loan?

In most cases, yes, you'll need to provide proof of income when applying for a mortgage, loan, or another credit product. With that said, providing your Social Security Number when applying for smaller products may be fine in place of proof of income.

What should I do if I can't provide proof of income?

In a situation where you're unable to provide proof of income, discuss the situation with the requesting party and see if there's anything they can do to help you. Negotiating the documentation requirement or offering a larger deposit may be an acceptable alternative.

Can I use my spouse's income as proof of income for a joint application?

Yes, spouses can typically combine their incomes on applications. Lenders may require proof of both incomes, like tax returns or pay stubs from both of you.

Take charge of your finances with EarnIn

Proof of income statements are only one way that lenders verify your financial situation — and they’re often requested alongside your credit score. While you know how much you get paid, you might not be sure what your credit score is.

Luckily, EarnIn’s Credit Monitoring Tool lets you check your score whenever you want. Knowing your credit score gives you more insight into your financial well-being and how you can improve it.

And, if you do earn regular income, you can use EarnIn’s innovative Cash Out tool to access your pay as you work. Simply download the app, add your employment information, and get up to $150/day and up to $750/pay period of your pay.

Download EarnIn to make every day payday.

Please note, the material collected in this post is for informational purposes only and is not intended to be relied upon as or construed as advice regarding any specific circumstances. Nor is it an endorsement of any organization or services.

1. Calculated on the VantageScore 3.0 model. Your VantageScore 3.0 from Experian® indicates your credit risk level and is not used by all lenders, so don't be surprised if your lender uses a score that's different from your VantageScore 3.0. EarnIn services may not be available in all states. Learn more: https://www.experian.com/assets/consumer-information/product-sheets/vantagescore-3.pdf

2. EarnIn is a financial technology company, not a bank. Banking Services are provided by Evolve Bank & Trust, Member FDIC. Subject to your available earnings, Daily Max and Pay Period Max. EarnIn does not charge interest on Cash Outs. Restrictions and/or third party fees may apply. For more info visit earnIn.com/TOS.