The pay stub details about the employee’s pay, like itemized wages and a year-to-date payroll. It can be full of abbreviations and buzzwords. People may find the intricacies of sample check stubs a barrier to understanding.
Learning how to read a pay stub is important to fiscal health as well as company health. It is important to learn the ins and outs of the pay stub. So let’s take a look at five parts that every sample check stub has.

1. Gross Wages

Everything starts with gross wages. Gross wages are what attracts many people to a job. Gross wages are the employee’s wages before any deductions come out.

Calculating gross wages depends on whether the employee’s pay is a salary or hourly. To get hourly, multiply the employee’s hourly rate by hours worked. Salaried workers’ gross wages are their annual salaries divided by the number of pay periods that year.

2. Taxes

There are various taxes the government, both federal and state, take out every pay period. These taxes include state and federal income tax, and the employee’s FICA tax. The various taxes are usually itemized on the pay stub.

3. Deductions

Deductions that come out of the employee’s gross wages are things like company benefits. For example, an employee might pay for insurance premiums or a retirement plan. Voluntary deductions, such as charitable donations and wage garnishments are also listed here.

4. Contributions

An employer’s contributions are not deducted from the gross pay but are as important. These contributions reflect the employer’s tax portions, such as FUTA tax and SUTA tax. The employer’s contributions to employee benefits belong in this section as well.

5. Net pay

The amount left over after all the deductions is the Net Pay, this is the amount the employee takes home. Some employees will opt for direct deposit and so will only get their pay stub. In either case, the check stub still needs a review to ensure no mistakes happened.

Sample Check Stub Uses

There are several reasons to hold onto a pay stub after a pay period. Many financial institutions need many pay stubs to secure a loan. You may need them to prove employment and salary history.
To better learn all the useful information included on a pay stub, it might be helpful to use a free check stub maker so you can see how it all fits together. Sometimes it helps to visualize all the numbers. If you’re not sure, always seek help on pay stub issues.

Demystifying the Stub

Learning to read the sample check stub is an important skill to have. No matter if you are the boss or the employee, the ability to read your check stub can stop problems before they get too out of hand.
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