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Understanding Online Pay Stubs – A Complete Guide For Beginners

With the technology advancement, many companies have switched to online paychecks instead of mailing hand-written paper pay slips to employees. The pay stub is of great help to users, especially because of the many options available. Every pay stub is meant to serve a specific purpose.

Learning how to read a paycheck stub can help beginners track their income. Once you understand the layout and terminology of a paycheck stub, you can accurately track how much money you’ve earned. Keeping a careful record of your earnings will help you improve your overall finances.



Understanding your earnings

  1. Basic information – Look at the top of your pay stub. You will find basic information at the top, such as the name and address of your employer, employees’ security number, and the date the paycheck was issued.
  2. Discover the area labeled “Gross pay”- Gross pay is the total amount you earned, before any withholdings. The gross pay is usually over after a period of time, known as a pay period. Taxes and other withholdings will not be reflected in your gross pay. A pay period may vary depending on your employer if he uses a weekly, biweekly, or monthly period.
  3. Locate your “Net Pay”- Find the amount placed next to the area labeled net pay to learn about your earnings. Net pay is the number of your earnings that you actually receive.


Realizing what taxes and withholdings were taken

  1. Look for “Federal Tax Amount” – This area gives you the total amount that the Federal Government has taken from your pay for taxes due. This amount may vary depending on exemptions you claimed when you filed your W-4 tax form.
  2. Look for the area labeled “State Tax” – The area marked State Tax will usually be located next to the federal tax. The lists for state tax will show you your earnings that were paid to your state government. (State taxes are used for open ventures.)
  3. Locate the area labeled “Social Security” – Social security is a federally mandated payment into the social security system. Paying social security will help you finance your retirement.
  4. Locate the area labeled “Medicare” – Medicare is a program that may help with medicinal payments and installments once you are eligible for social security. Medicinal payment is mandatory for both you and your employer.

Finding additional items and summaries

1. Look for the area labeled “Year to Date” – Your date is a useful entry on your paycheck stub that shows exactly the amount you have earned, and taxes paid- till date. YTD is the area of paycheck stub that gives accurate financial records of your earnings.



2. Look for additional areas that may appear – Beyond the common areas, there may be areas with additional things to look for:

a.  Insurance Deduction: Look for payments made to insurance policy companies to have an accurate record.
b.  Retirement Plan: Keep track of your funds, and contributions deducted from your pay to save money for your retirement plan.

If you are wondering what a YTD is on a pay stub, the above-mentioned steps will help you. To learn more, visit http://paystubmakr.com/

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