How Do I Read My Paystub?
Every time you’re paid, you should get a paystub – either a paper copy or an electronic copy. It’s always a good idea to review your paystub so you know where your hard-earned money is going, but also to watch for any errors.
1. Earnings breakdown
The first part of your paystub will show how much you earned for the pay period, broken down by pay type. If you’re paid an hourly rate and commission, you would be able to see how much you made for each. For hourly wages, you’ll often be able to see your hourly rate and how many hours you worked.
2. Gross wages
After your earnings breakdown, you’ll see your gross income. This is the total amount you made for this pay period before any taxes or deductions were taken out.
3. Year-to-date wages
Your year-to-date (YTD) wages will show you how much you’ve made so far this year.
4. Federal income tax
The amount withheld for federal income tax will depend on your tax rate, how many allowances you claimed, and any pre-tax deductions (such as health insurance premiums or certain retirement contributions). If you don’t think the right amount is being withheld, then you can submit a new W-4 to your employer. Click here to learn more about filling out Form W-4.
Everyone is required to pay Medicare tax, which is used to fund health insurance for people over the age of 65 or with disabilities. Your employer will withhold 1.45% of your gross wages for your Medicare contribution.
6. Social security tax
You’ll also pay 6.2% of your wages to Social Security, which provides income to eligible recipients, usually retirees and people with disabilities.
7. State income tax
If your state has income tax, then you’ll also see how much state income tax was withheld from your paycheck. Like federal income tax, the amount withheld depends on pre-tax deductions, your tax rate, and how many allowances you claimed for the state.
If your county or city has its own income tax, then you would also see how much was withheld for that.
8. Other deductions
If anything else was deducted from your paycheck, you’ll be able to see how much was deducted and for what. These deductions could be voluntary, like health insurance or 401(k) contributions, or they could be court ordered, like child support payments.
9. Gross deductions
You’ll also be able to see the total amount withheld and deducted from your paycheck.
10. Year-to-date deductions
Your YTD deductions will show you how much has been withheld and deducted from your gross wages so far this year.
11. Net check amount
Your net check amount is the amount that you’ll see in your bank account and is probably the amount you care most about. It’s your gross wages minus your gross deductions.