It is the expectation of everyone after working to get a paycheck as agreed with your employer before starting a job. However, there is the need to know that a paycheck is usually followed by a pay stub. The pay stub helps to show all the deductions that are made on your paycheck. There is the need to know that deductions usually are made using specific codes which makes it hard for a lot of people to know their meaning. The following are some of the deductions that are usually made on your paycheck that you need to know.
First, you pay for the Fica Med Tax. You may have realized that what you were promised is not exactly what you received. There is the need to know that Federal Insurance Contributions Act (FICA) has a cut of your pay. The federal government deducts some money from your salary to contribute to the Medicare program. The deducted money is used to keep the program that helps those who are over the age of 65.
Fica SS Tax is a common deduction on your pay stub. Anyone who is employed is legally obligated to make contributions on the social security program. The Fica SS Tax is deducted from your pay to support the social security program. The social security supports eligible beneficiaries especially those with disabilities and the retired employees. Once you reach the retirement age, you need to know that you can claim for the SS benefits.
State tax deductions are also common in the pay stub. The state tax deduction is a common deduction among many people. You need to know that you will find a specified amount in case your state allows this form of tax. You will find that not all states allow the state income tax in their areas. It is therefore important to know if your state allows the state income tax or not to ensure that the right deductions are made on your paycheck.
There is also the federal Tax deductions. This is taken and recorded as the federal tax on your pay stub deductions. The amount that is removed from your pay depends on several factors such as the tax rate and the number of allowances you receive. Also, the employee benefits that you receive, retirement contributions and the pre-tax on health insurance also plays a significant part in what you are supposed to pay as federal tax.
Getting to know what deduction is made in your paycheck as provided on the pay stub is important.
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