You find that the PayStubs can be a little confusing because of the different information on them. I can admit there is no better feeling like being handed your check and the PayStubs near the end of each work week. Unfortunately, the large number of people don’t take their time to read and understand paystubs despite receiving them in most cases. You should know that when you are not doing that you are doing your financial future a wrong. Remember 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.
You should start with the employee earnings. You find that this is the basic area 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. You find these are the figures that will be used to calculate your gross pay. In case you are paid salary, your working hours will be set default at 40 hours per week.
Apart from that, you should also look at the employee taxes withheld. One thing that you need to know is that the first place your gross pay will go towards is your taxes. One thing that you need to understand is that this section on your stub will contain the amount that is taken 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. These are the pay-as-you-go which will prevent you from paying a huge lump sum to the government come tax time.
Besides, you should also concentrate on the section of 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. Remember that this money is set aside for you to go through these various programs. Even though you might feel bad when the money is being deducted but you can rest easy knowing that the money will still benefit your health and future. In case you are working somewhere where your employer helps to contribute to your healthcare or retirement, you will see it reflected in a separate area.
To sum up, I can tell you that reading a pay stub can be a vital skill if you wish to understand where your money is going each period.