How To Read a Paycheck Stub

Your paycheck stub is a gold mine of information.

Your paycheck stub is a gold mine of information.

When your employer pays you, whether by check or by direct deposit, you receive a paycheck stub. It will either be a paper stub or a report you find online Either way, there’s information on it that tells you what you earned, when you earned it and what was taken out for taxes, insurance, retirement and other items.

Look for the words “Gross Pay” or “Gross.” This is the total amount you earned, before withholding. There might be a pair of dates following this amount, indicating the first and last days of the pay period covered by the pay check.

Locate the phrase “Federal Tax.” It might be abbreviated as FT or FWT, which stands for federal withholding tax. This is the amount your employer has withheld from your check to pay the IRS on your behalf. It acts as a prepayment against the total amount of income tax you will owe at the end of the calendar year. It is based on your pay and your payroll deductions. State taxes are indicated by “State Tax" or the letter ST or SWT. This is the amount your employer has taken out to pay to the state government on your behalf in prepayment of your state tax liability. You may also be blessed with local, county or city income taxes. The labels on the boxes on the check are usually self-explanatory.

Look at the stub and find the letters FICA, OASDI, SS, or SSWT, or just look for the words “Social Security.” This is the money taken out of your check to fund the Social Security system and equals 6.2 percent of your gross pay. “Medicare” or MWT is the 1.45 percent of your gross pay that you owe Uncle Sam every payday for the Medicare services that, hopefully, will be available to you when you reach age 65.

Find "Other Deductions." This is where you might find the money taken out for health insurance plans, retirement plans and other benefits.

Find “Miscellaneous Deductions.” This might be abbreviated, too, often appearing as MISC or Misc. Ded. These items, if any, are those that you’ve elected to have your employer pay on your behalf, out of your paycheck. They include such things as union dues or purchases made through your employer for uniforms, equipment or tools.

Pinpoint “Net Pay.” This is what is left you all of your taxes, benefits and miscellaneous items have been deducted from the gross pay.

Tips

  • Not all states have a state income tax. If you live in one of those states, you won't see the state withholding category on your check.
  • The letters “YTD” or the phrase “Year to Date” may follow each deduction or tax. This is how much of each tax or each deduction you’ve paid during the current calendar year.
 

About the Author

Will Charpentier is a writer who specializes in boating and maritime subjects. A retired ship captain, Charpentier holds a doctorate in applied ocean science and engineering. He is also a certified marine technician and the author of a popular text on writing local history.

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