Every paycheck that you get oftentimes comes with pay stub. Basically, this is a piece of paper which states the amount of money that you have earned for a certain time and also, the amount that’s deducted for insurance and taxes. Normally, the paystub is available with codes for both deductions and earnings. Normally, the deductions on paystub are something that many people aren’t able to understand. It is essential for you to know what amount is withheld and why.
We will cover some usual deductions present in paystub in this article which will help you a lot to know what it exactly means. I encourage that you read the next paragraphs if you would like to learn more about this subject.
Number 1. Med Tax – you might be wondering why you are not getting the expected amount when you were given a job offer. This is due to the reason that part of your pay goes to FICA or Federal Insurance Contribution Act. This is actually a federal payroll that is making deductions from your salary to contribute to the Medicare program. These said deductions are made to run the program for those who are 65 years old and above.
Number 2. SS Tax – from the time being that you’re enrolled, you will be required to contribute to Social Security program. This program is providing support to all the eligible beneficiaries most especially those who are candidate for retirement and disabled. You may claim your SS benefits once you hit your retirement age. You may further read about paystub, go to https://en.wikipedia.org/wiki/Paycheck.
Number 3. State Tax – you will notice that there’s a column in your paystub saying state taxable wages. If there’s a specified amount you found in this column, then it only means that your state is allowing state taxes. Then again, if your state is not allowing it, then it will be left blank, simple as that. As a matter of fact, Alaska, Florida, Washington, Nevada and Texas are states that levy income tax, you can also click for more details!
Number 4. Federal Tax – in addition to Social Security and Medicare paystub deductions, the federal government is taking its fair share. The amount on the other hand is going to vary depending on your tax rate and allowances. Aside from that, it will depend on your retirement contributions and your pre-tax expenses on health insurance as well as other benefits. Visit this website now!
Number 5. State Disability Insurance (SDI) – this deduction is very common among workers in the state of California. In case that you are covered by SDI, then you’ll have the privilege to have coverage from Disability Insurance and Paid Family Leave.
