A Guide through Pay Stub Deductions
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.. Also, you will realize that a pay stub usually contain codes for earnings and deductions. For some people, it is always challenging to interpret the information contained in a pay stub and thus are forced to raise complaints. For that reason, you will understand your pay stub so that you can know why the deductions are made from your salary. Keep reading this article so that you can learn some vital information regarding pay stub deductions in your monthly earnings.
Your monthly earning are always less than the salary that you agreed when you landed a job. First, you should know that Federal Insurance Contributions Act (FICA) has a share in your salary. The deduction is usually made to the Medicare program that takes care of individuals who have hit 65 years. Also, you have the legal mandate to contribute towards the Social Security Program. Social Security Program deduction is usually indicated as Fica SS Tax. Once you attain the retirement age, you can claim your SS benefits.
State income tax is the other thing that you will find in your pay stub. State tax is not always applicable in all states. Some of the states that do not allow state income tax include Texas, Nevada, Alaska, Florida, and Washington. Also, you will find federal tax. The amount that you pay as a federal tax depends on the 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.
Also, you will find a State Disability Insurance (SDI) column in your pay stub. The deduction is usually meant to take care of people living with disability. All workers in California as usually subject to SDI deductions. Therefore, if you are going for a family or disability leave, you will receive a percentage of your salary. Finally, a pay stub usually contains miscellaneous deductions. Miscellaneous deductions compromises of deductions that you sign up for such as health insurance and retirement. Miscellaneous deductions usually come before taxes hence you can sign up for them to lower your taxable income.
In conclusion, you should know all your deductions before starting a new job. 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.