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Essential Tips for Reading a Pay Stub
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. The truth of the matter is that even though we receive paystubs all the time, many people don’t take time to read and understand them. You should know that when you are not doing that you are doing your financial future a wrong. Besides, the paystub breaks down the different areas that you work hours to go towards supporting. By the end of this service, you will discover more things that you should check in the paystub when reading it.
When reading paystub, you should start with employee earnings. The primary part of your paystub is this area because it breaks down your hourly rate and the number of hours you have worked for the given pay period. Besides, it includes any overtime hours you worked. You find these are the figures that will be used to calculate your gross pay. On the other hand, when you are salaried, your working hours will be set to a default which is 40 hours per week.
Besides, you should also concentrate on 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. This section on your pay stub will include the amount taken from your check to be sent to the government. After which they will 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.
Apart from that, you should also check the section of employee deductions. You should know that taxes are not the only things that get taken out of your paystub each period. Besides, deductions are also made for your retirement, healthcare, and many other benefits. 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.
Remember that reading a pay stub can be an essential skill if you wish to understand where your money is going each pay period.