While you make Online Pay Stubs, you must be aware of each and every single thing which is reflected on your paycheck. This blog is all about the right section i.e deductions appearing on your real check stubs.
If you are an employee who is receiving paychecks regularly, then don’t just let it sit in your mailbox. Learn how to decode it as it is an important document.
Related Read: 7 Things Every Employee Should Know
Let’s have a look at the mandatory deductions which are made from your pay. You just have to know what they are and why there are taken as deductions. You don’t have to get into the calculations as they will be done by the free paycheck stub calculator online.
Deductions from Paycheck Stubs
Check out the deductions from paycheck stubs individually here:
FICA Med Tax
If you are thinking that you are being paid less than promised then you should know that the Federal Insurance Contributions Act (FICA) has a share in your pay. A fixed percentage of amounts is deducted from your payroll and is contributed to the Medicare Program. The amounts thus deducted are then utilized to run the program for those aged 65 years or older. So when you see your free check stubs showing this amount, this will strike you.
FICA Social Security Tax
As per the laws, every employee is obligated to contribute to the Social Security Program. Many beneficiaries including people with disabilities and retirees rely on the Social Security Tax. This tax can only be claimed when you reach your retirement age which is reportedly 67 for millennial.
Depending on the state you work in, you will see State Tax column reflecting on the deduction side. It is also possible that you don’t see this tax mentioned specifically when you generate free pay stubs and this is just because your state does not require it.
For instance, Texas, Nevada, Alaska, Florida, and Washington are US States which does not require its employees to pay income tax.
Besides FICA Medical Tax and Social Security Tax, employees are also required to pay Federal Tax as mandatory. This amount differs according to the number of allowances and tax rate. Your retirement contributions and pre-tax expenses on health insurance and more employee benefits are also taken into consideration for calculating the federal tax.
State Disability Insurance
All the Californian employees are bound to have this deduction in their paycheck. Having covered by SDI, you are benefitted through Paid Family Leave (PFL) & Disability Insurance (DI). You are eligible to receive a percentage of your salary while taking a family or disability leave.
When you make free pay stubs, it will also show other deductions which includes retirement, cafeteria plan and health insurance which are signed-up by you. These miscellaneous items are taken into account before your taxes and your taxable income can be reduced if you have signed up for them.
Hoping that you have understood the basics, it’s a great time to create free printable pay stubs now!