3 Simple Steps to Reading Your Pay Stub



When your employer pays you, you may not always remember it is a legal document. The money you get goes in your pocket must be tracked. The company tracks how much they give you, the government creates and records deductions based on your wage, and you save this information to have a better understanding of your finances.

Every pay stub you receive is important, and you want to be able to read it to ensure the content is accurate. Read these three tips to learn how to read them the right way and catch potential errors.  

1. Learning the Basics

The first thing you should do is familiarize yourself with the basics. This means knowing all the terms, initials, and sections that will appear. The first thing you will see and verify is your personal information.

Look at the pay period dates and confirm the pay stub shows it from the beginning to the end of every payment period (weekly, bi-weekly, monthly). You will also see your filing status which, like taxes, or needed as a way to confirm whether or not you are single. If your employer doesn’t offer pay stubs, you can make your own using a checkstub maker online. 

2. Identify Government Taxes

All the money you make is taxable by the government. On your deductions, or money that is subtracted, taxes may be the most confusing section. Funds removed from your check include federal taxes, state taxes, Social Security, and Medicare. 

State taxes are something you may or may be required to pay depending on the state you live. Federal taxes, however, are for every state and are held until the end of the year. This is money you may get back, or partially, if too much is removed.

FICA laws require that every worker contributes to Social Security and Medicare.

3. Know What Gross and Net Pay Are 

All the money you make at your job, before all taxes and other deductions, is your gross pay. You can refer to your gross pay to check for accuracy such as your hourly pay, bonuses you receive, the amount of overtime you did. 

Your gross pay per pay period is added on every pay stub as well as total gross pay for the year. Net pay is the money that makes it to your bank account for immediate use. It is better to refer to your net pay when creating a spending plan, savings, or finding ways to reduce debt. 

Make Reading a Pay Stub Easy 

Reading your pay stub is not too complex once you learn what every section is. You can skim through the document with ease once you do. It’s an important paper trail you need when you are working because it verifies you are getting paid for the work you do and at the right wage or salary.

Sometimes errors can happen with deductions and more money is removed than it should. In these cases, you can bring the issue up and correct it. 

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