It’s the best day of the week—payday! We all love the feeling of getting paid, but how much do you know about your pay documentation?
Understanding your paycheck and pay stub are important because these documents explain how much you’ve been paid and why. Accounting errors aren’t uncommon, so reading your paycheck is essential in double-checking that you were paid correctly.
Are you trying to make sense of your paycheck? If so, keep reading to find our pay stub guide to help you out.
Understanding Your Paycheck
Does your company issue you a paper paycheck that you need to deposit at the bank? While direct deposits are becoming more common, over 50% of businesses are still using paper checks for their payments.
If your company gives you a paper check each week, it will include your total amount of pay, after taxes and deductions are taken out. It should be made out to your name and should also list the details of your company.
Check your paycheck to make sure the amount of pay is correct—if anything looks wrong, don’t cash the check—talk to HR first.
Understanding Your Pay Stub
Whether you get paid by direct deposit or a paper check, you’ll also get a second document, called a pay stub.
Paycheck stubs provide more detail as to the amount you earned and a breakdown of all of your key financial details. Here are a few things to look out for on your payslip.
Gross Pay
Your pay stub will list your gross pay—that is, the total amount of money you earned before any taxes or deductions are taken out.
For salaried workers, this is likely to be the same each week, but for hourly workers, this will vary based on overtime and hours worked.
Taxes
A payslip will also include details on how much tax was withheld. Generally, this will include both state and federal taxes.
If you’ve overpaid taxes for any reason, you can claim them back when you file your taxes.
Other Deductions
Your payslip will also include any other deductions taken from your pay. This might include health insurance, Medicare, or retirement plans.
Leave Balances
When it comes to understanding a pay stub, you’ll also want to check out your leave balance. This section will tell you how many days of annual leave and sick leave you’ve used during the year and how many are remaining.
This is useful to keep track of your time off or if you’re thinking of planning a vacation.
Use These Tips to Make Sure You’re Paid Correctly
As you can see, understanding your paycheck and payslip is easier than you might think! Use these tips to read through your paycheck each week.
By taking the time to read your pay documentation, it helps make sure you’ve been paid correctly, so don’t skip this! You work hard each week and need to make sure you’re being rewarded fairly.
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