A pay stub is a paper that shows deductions from the amount of money earned in a monthly. Every month, you will get your check together with a pay stub where you will find information regarding deductions such as insurance and taxes.. Another feature of a pay stub is the codes for earnings and deductions which are usually specific to individuals. Most people are usually not informed about a pay stub thus reporting complaints to their employers when they receive their checks. For that reason, you will understand your pay stub so that you can know why the deductions are made from your salary. By reading the article herein, you will get to learn more about different pay stub deductions and what they mean.
When you receive your salary, you will realize that the figure is not the same as what you agreed with your employer. One of the things that will reduce your monthly earnings is Federal Insurance Contributions Act (FICA) deductions. The money that is deduced by FICA is usually channeled to Medicare program meant for individuals who have reached 65 years. Apart from Medicare program, another deduction will be made from your earning towards Social Security Program. Social Security Program deduction is usually referred to as Fica SS Tax in your pay stub. You should know that you can claim your SS benefits when you reach 67 years which is the retirement age.
Next on your pay stub you will find state tax deductions. State tax is not always applicable in all states. As a resident of Texas, Nevada, Alaska, Florida, and Washington, you will not have to worry about this deduction as it is not applicable. The other tax that is associated with the government is the federal tax. Federal tax is usually not the same in all individuals as it depends on the number of allowances and tax rate. Moreover, the amount that you will pay as a federal tax depends on the retirement contributions and pre-tax expenses on health and insurance.
State Disability Insurance (SDI) also have a share in your income. It is meant to take care of individuals living with disability. All workers in California as usually subject to SDI deductions. In the event of a family or disability leave, you will receive a fraction of your salary. Finally, the reduction in your salary is attributed to miscellaneous deductions. On miscellaneous deductions list, you will find the deductions that you sign up for such as retirement, health insurance, and cafeteria plan. The deductions are usually given priority hence a suitable means of lowering your taxable income.
Therefore, before you start your job, you should learn about all the deductions that you are subject to. The deductions usually differ in states. You should not hesitate to report to the relevant authorities if you notice that things are not adding up in your pay stub.