After working, everyone expects nothing less than a paycheck. 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. The fact that coded language is used in the deductions makes it difficult for the layman to get to know what is what on the pay stub. Discussed below are some of the deductions you need to know about when you look at your pay stub.
The first deduction on a pay stub is the Fica Med Tax. At times people find themselves not getting exactly what they expected when they first got the job. There is the need to know that Federal Insurance Contributions Act (FICA) has a cut of your pay. The deductions by FICA is particularly used to keep the Medicare program running. There is the need to know that you are eligible for this program once you attain sixty-five years.
The other type of deduction is the FICA SS Tax. There is the need to understand that you are obligated to contribute to the social security as long as you are working. The Fica SS Tax is deducted from your pay to support the social security program. You need to know that the program is mandated to help those who have reached retirement age and also those with disabilities. It is important to understand that as a millennial if you attain the age of 67, you are liable to the SS benefits. Click here for more info.
There is also the state tax deductions. The state tax deduction is a common deduction among many people. If you find a specified amount, you need to know that your state allows the state taxes deductions. 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.
Apart from these
deductions, you need to know that the federal government has a share on your income. It is important to know that in your income, the federal government have a fair share of the same. There are several factors such as allowances and tax rates that affect this form of deductions. On top of that, the retirement contributions and the other benefit as an employee you get determine what you need to pay as federal taxes.
There is the need to have an idea of the deductions that are made on your pay stub.
Read more at https://www.huffpost.com/entry/how-to-handle-employee-pa_b_11914184