What to Look for When Reading Pay Stub
Being that the PayStubs contain different categories of information, they can be a little confusing. It is essential to note that there is no better feeling than being handed your check and the PayStubs near the end of each work week. You find that most of the people always don’t take time to read and understand paystubs no matter how often they receive. You should know that when you are not doing that you are doing your financial future a wrong. You find that paystub breaks down the different areas that you work hours to go towards supporting. Here are some of the tips that will guide you on reading paystubs.
When reading paystub, you should start with employee earnings. This part is vital since it breaks down your hourly rate and how many hours you worked for the given pay period. It also contains any overtime hours you worked. It is essential to note that these are the figures that will be used to calculate your gross pay. On the other hand, when you are salaried, your working hours will be set to a default which is 40 hours per week.
Besides, you should also concentrate on the employee taxes withheld. It is essential to note that the first place your gross taxes will go toward is your taxes. You find that this area will include the amount that is deducted from your check to be sent to the government. When that is done, the amount will later be included on your W-2 for tax filing purposes. You can as well refer to them as pay-as-you-go as they will eliminate the cases of paying a huge lump sum to the government come tax time.
The other sensitive area that you should concentrate on is employee deductions. It is essential to note that taxes are not the only thing that is taken from your pay stub each pay period. You should also know that deductions are made for your retirement, healthcare and many more benefits. This money is set aside for you to go through these various programs. At some point you might feel bad when you see the money go but one thing that you need to understand is that this money will still benefit your health and future. There is also a group of people who work somewhere where the employer helps to contribute towards your healthcare or retirement of which you will see the amount reflecting in a separate area as well.
To conclude on this, you now understand that reading a pay stub can be an essential skill if you hope to understand where your money is going each pay period.