Online Freelancing: If You’re Paid Hourly,
Should You Request a Pay Receipt?

See also: Top Tips on Freelancing

The internet has made it possible for people to find jobs and make money from home. But with all the freedom and flexibility, there are still some significant drawbacks. When you’re an online freelancer, you can lose track of how many hours you work and what you’ve actually been paid. And if you’re paid hourly, should you request a pay receipt?

This article will give you the pros and cons of requesting a pay receipt for your freelance job, as well as what effect it may have on your relationship with your client.

Freelancer working on an iPad.

What are the benefits of requesting a pay receipt?

For freelancers, your invoices may already serve as a pay receipt of sorts. However, invoice statements are not always easy to use for establishing proof of income. This becomes easier as you refine your invoice and make it more specific to your industry and purpose. Luckily there are many examples available and even a freelance artist can find a free painting invoice template. Other examples are if you want to apply for a loan, many companies will request that you show records of regular payment. So, a person who receives a bi-weekly paycheck, for example, will have an advantage over someone who just shows up with a handful of PayPal invoices.

Furthermore, pay stubs make it a bit easier to file your taxes. Many online freelancers find it easier to document their income using pay stubs, because it’s a standardized way to tally up your income.

If you are self-employed and own your own business, you might pay yourself a salary, and that includes writing yourself a paycheck with any deductions that a salaried employee would typically make. You could make this even easier with an online paystub generator, and use pre-made templates for this purpose. Your accountant or other tax preparer should be able to help you determine what works best for you.

Overall, a pay stub isn't an absolutely necessary thing for a freelancer to receive, it just benefits you in some situations, the biggest being establishing a paper trail of income to show creditors. For example, you might use the Invoice Template for your clients at the end of the month for all projects completed. But this might seem like sporadic income to a lending company.

With regular pay stubs, you can better establish that you're paid regularly and able to meet payments on time, which may make it easier for you to obtain a loan. And if you use online payroll services, your accountant can also run reports to verify your income.

What are the risks of requesting a pay receipt?

There aren't any really, it never hurts to ask - but your clients might not be familiar with creating pay stubs. For example, a creative agency owner may only be familiar with paying freelancer's invoices and doesn't know how to properly create a payroll document.

One of the risks is that your client may accidentally categorize you as an employee, opening themselves up to legal liabilities, such as paying you overtime hours if you worked more than 40 hours a week.

Because many freelancers work on a project basis, the hours worked are typically not billed for, only a fixed rate for the project itself. So a client may believe that by recording your actual hours worked on a project, they become liable for overtime pay.

There may be some truth to this, so it's a matter of verifying that you're actually paid for the work, rather than for time worked. A pay stub doesn't need to be an official, FLSA-compliant document that tracks hours worked, it can be a simple pre-made template that verifies from the client they are paying you for work completed on a regular basis.

How to Request a Receipt

Asking your client for regular pay receipts is simply a matter of asking, and explaining why you need it. The client may not be familiar with pay stub generators or be willing to pay to use one, so you'll have more success if you pay for the software and have them generate the pay stubs from pre-made templates, which are easily available.

It's really not a burden on the client, and if they have an accountant who regularly pays their freelancers, then it's just a matter of the accountant generating a pay stub along with invoice payments. So after your invoice is paid, the accountant can simply generate a pay stub that acts as a sort of "paycheck", so to speak.

What If They Won't Provide One?

A client can legally deny you the payment receipt if they don't believe you're an employee. This can be a tricky situation, because your client might be at risk for claiming you as an employee in an employment lawsuit. This goes back to having clear transparency that your paystub is for proof of regular income, not to establish you as an employee or track hours worked.

Explain to your client exactly why you want and need a regular pay stub, such as you're hoping to obtain a mortgage loan or some other form of capital. Without a pay stub, it's difficult to prove regular income.

The best way to approach this situation is with the understanding that your client might not grant you a pay receipt, but that you're not out of options. As a creative freelancer, you can also generate your own pay stubs.

One way to do this is to form yourself as an LLC (Limited Liability Company), so that you can do your own payroll, and then pay yourself as an employee. This also has a few tax benefits, such as being able to take deductions for the business costs you incur as a freelancer, such as business car expenses, maintenance, and repairs.

So really, even if obtaining pay stubs from your clients isn't your primary goal, forming an LLC as a freelancer is a beneficial thing to do because it has advantages for your taxes. You'll also appear more professional, be able to negotiate better rates with clients as an actual business rather than an individual freelancer, and you may even find it easier to start your own agency and hire other freelancers to work for you.

Further Reading from Skills You Need

The Skills You Need Guide to Self-Employment and Running Your Own Business

The Skills You Need Guide to Self-Employment and
Running Your Own Business

If you are thinking about running your own business, or already do so, but feel that you need some guidance, then this eBook is for you. It takes you through self-employment in easy steps, helping you to ensure that your business has more chance of success.

The Skills You Need Guide to Self-Employment and Running Your Own Business is the guide no new or aspiring entrepreneur can afford to be without!

Based on our popular self-employment and entrepreneurship content.


Whether or not you decide to ask your clients for a pay stub, you should consider the benefits of doing so, and forming yourself as an LLC to obtain the tax benefits it provides, as well as being able to pay yourself as an employee of your LLC, which will actually serve you a lot further than asking your clients for pay stubs to begin with!

About the Author

Cristina Par is a content specialist with a passion for writing articles that bridge the gap between brands and their audiences. She believes that high-quality content plus the right link building strategies can turn the tables for businesses small and large.