Understanding the information in your paycheck stub
It is important to understand the information on your paycheck. It includes your tax filing status, withholdings (that could impact you take-home pay), and the workplace benefits you are currently receiving. Reviewing your paycheck stub may help you identify ways to increase your take-home pay.
Paycheck stubs are normally divided into different categories:
- Personal Information: This section includes your personal information like your name, address, and employee number. It also includes your filing status--single or married--as well as the withholding number that you elected on your IRS form W-4.
- Earnings: This section describes your earnings during the defined pay period and includes things such as overtime. The earnings section also shows pre-tax deductions for different benefits that you may receive from your employer, such as health insurance and retirement plans. Pre-tax deductions lower the amount of income that is subject to taxes, which may actually increase your take-home pay.
- Deductions: This section shows additional deductions that might be taken out of your paycheck after taxes, like group life or disability insurance.
- Withholding: This is the money that your employer is required to take out of your paycheck on your behalf and includes federal and state income tax payments, Social Security, Unemployment Insurance, and Worker’s Compensation.
While the “withholding” section contains mandatory deductions, the other sections contain information that you have more control over.