With direct deposit, it can be easy to let your paychecks go into autopilot without checking them. However, it’s still important to know what’s on there and where your money is going. Here is a brief explanation of the basic information you’ll find on your paystub and what it means.
GROSS WAGES
This is the amount that you make before your taxes and other deductions are taken out of your paycheck. This will include what your gross pay is for that paycheck and what you have made for the year to date (YTD).
TAX DEDUCTIONS
Tax deductions include your federal and state taxes, as well as any local taxes that may apply depending on where you live. You also will have funds that go to FICA, also known as the Federal Insurance Contributions Act. These contributions to this go towards Medicare and Social Security and are paid by both employees and employers.
BENEFIT DEDUCTIONS
If you receive health, dental, vision, life, or disability insurance through your employer, this is when those funds are deducted. This also includes health savings accounts, flexible spending accounts, and any retirement accounts you have through your employer.
NET PAY
This is the final number of what is left of your paycheck after all of these previous expenses are paid. This is also known as your take home pay.
