Name: Understanding your Paystub
Uploaded: 2022-02-03
Duration: 8 min 22 s
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Your paystub is talking but are you listening?

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Date Pay Period Gross Pay Net Pay Deductions Contributions Other Deductions and Contributions

The anatomy of a paystub is not all that complex. I will break it down piece by piece and show you what it all means. We will look at both federal and State rates because there are slight differences between them in some cases. Ready? Let's begin!

Produce by CLE Bookkeeping Solutions narrated by Casey Edmondson

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Federal Tax Withholdings State Tax Withholdings Medicare Tax Withholding Security Tax Withholding Hours/Overtime Leave Time

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Additional Pay Information Total Amount Paid

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The date on your pay stub is essential because ... well ... it tells you when you get paid! Pretty self-explanatory, right?

It's important to know the days included in the pay period and when it ends. Companies can have many different pay schedules, for example a company may pay every two weeks starting Monday and ending on Sunday. The pay date for the payroll could be any day Monday-Friday of first week in the pay period.. 

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On your paystub, you will see something like this: "Pay Period 01/01/2021 – 01/07/2021” or “Pay Period Ending on 01/07/202”1. Pay period means the time frame from which payroll must calculate taxes and deductions for you for a specific length of time.

It's important to know  the days included in  the pay period and when it ends. Companies can have many different pay schedules, for example a company may pay every two weeks starting Monday and ending on Sunday. The pay date for the payroll could be any day Monday-Friday of first week in the pay period.

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This may be one of the most essential pieces of information on your paystub, and you should know it inside and out. Gross pay is how much you made in gross income during this pay period (the numbers BEFORE taxes and deductions).

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hcome Tax
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This is the total amount of money remaining after all deductions have been recorded for a specific date range.

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Federal hc.orne Tax
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Medicare Tax
NY State incorne Tax
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Life Irsumce
Net P ax
EFFECT THS PAY PERCO YOIR REGULAR
HDIJRLY RATE HAS BEEN CHANGED FFOU sg.m
TO
WU BE STARTING OUR WAY
DRPÆ SCON AND LCOK FORWAFO TO YOUR
PARTICIPATION.

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This area of the paystub lists all the federal and state tax deductions, as well as any payroll contributions you made that will be deducted from your income for this specific pay period. .

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This area of the paystub lists any payroll contributions you made that will be deducted from your income for this specific pay period.

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You will see an area where other deductions may be noted on the paystub. These are often related to garnishments, loans, court orders, or different types of obligations that must be paid periodically. You will als o see:   Retirement Contributions : These deductions reflect any contributions you made to a retirement plan, such as a 401k or 403b plan.  Meals & Misc.  - Here's where we can find out how much money has been deducted towards meals and other ancillary expenses such as uniforms and tools. These deductions are usually made per pay period rather than monthly, even though they can't exceed a maximum dollar amount in some cases, which is common in unionized labor environments. Other examples might include when the employer decides to start deducting for housing, transportation, or other living allowances when employees relocate from one location to another.

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This number represents the amount of federal (Fed) tax already withheld for this specific pay period. The Fed tax withholding may change in future pay periods depending on any changes in your personal or financial situation that can affect your taxable income, such as job status (leave of absence, maternity leave), marital status (single vs. married), and how many allowances you choose (if any). For example, full-time students get at least one allowance, so their Fed tax withholdings are very low because they have low incomes overall. Married employees are allowed more exemptions than single employees, so their Fed taxes are typically higher because they get more withholding allowances.

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This area reflects how much state tax has been withheld for this pay period. The amount of state tax withheld may change in future pay periods depending on any changes in your personal or financial situation that can affect your taxable income (see above). The state and federal tax withholdings should be the same except in some states, such as Oregon and Washington, which do not have an income tax. In that case, the net amount would be different from what you see here if it were included in your Fed amount.

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These are the Social Security taxes deducted for this specific pay period. As with all other deductions, these will likely change slightly based on personal or financial changes varying your taxable income. There is a maximum amount of Social Security tax you will pay throughout the year whether you make more or less money in a given year, so this number may differ from what you paid last time.

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This represents the Medicare tax deducted for this specific pay period. You can typically find both the federal and state Medicare deductions under "Other Deduction" if they don't show up as separate deductions on any given pay stub.

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This is another way of showing how many hours you've worked during this pay period, so it varies from one pay period to the next, as shown in the example above. For example, if you work part-time, you might see something like "15.0 Hours / Overtime," meaning that you worked almost nine hours of overtime during this pay period. If the amount is negative, you've worked less than your scheduled hours which can happen if, for example, an employee calls in sick or if their schedule was changed during the workweek due to lack of work, etc.

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This shows the amount of time you've taken off during this pay period. It is usually "0.00 Hours" on your first pay stub because it's a new job, and you haven't yet taken any time off during that workweek.

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In addition to previous deductions, other federal withholding information such as W2/1099 reporting statements, additional pay items not listed elsewhere

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IS what is just that…what left from your Gross pay after all deductions and contributions have been taken out. Leavening you with your Net Pay.

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Why the information at the top is important

The top of your pay stub is essential because this is where you're going to see all the pertinent information that you gave to your payroll department. It's going to tell the payroll system where to send your pay stubs, your paychecks, or your W2 at the end of the year. It will show your chosen tax deductions that you gave on your W4 and or your state form. It will also show whether you are in a state or a city where you must pay city or municipal taxes. While it may seem simple double-checking the address on your pay stub is important, that's where all these earnings are being reported. Where your earnings are being reported can affect many things, so make sure your address is correct. You may also see on there an identifying number like an employee ID. Number or your Social Security number? You will need to make sure that these are correct, as it could lead to incorrect reporting at the end of the year.

CO. TPT. ctocx
AE 126543
ACME SUPPLIES CORP.
475 KNAPP A VEWE
USA
Nu•rk:•:
Status: Wrréd
Exen a-ces:
FEjgat 3, $3 Addibra Tax
StMe 2
Loca: 2
Earnings Statement
P«iod
date:
JANE HARPER
7/18/200
101 MAIN STREET
ANYTOWN, USA 12345

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If you have any questions about its information, don't hesitate to ask contact CLE Bookkeeping Solutions. We will be glad to help.  You can find more information and resources through your website. A downloadable copy of this PowerPoint is available on the website in blog section.  www.clebookkeeping.com/blog You will also find that the blog has more information for you read on how to understand your paycheck.

Did we answer some of your burning questions about how your paycheck works?

Understanding your Paystub

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 If you have any questions about its information, don't hesitate to ask contact CLE Bookkeeping Solutions. We will be glad to help.  You can find more information and resources through your website. A downloadable copy of this PowerPoint is available on the website in blog section.  www.clebookkeeping.com/blog You will also find that the blog has more information for you read on how to understand your paycheck.

Understanding your Paystub

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