The 10 Most Unanswered Questions about
April 27, 2019
How To Read Your Pay Stub
Ability to understand the information contained in your pay stub is essential as an employee. The stub is a part of your paycheck that gives in detail your entire pay. In majority of states it is legally required for employers to avail the pay stubs to their staff. The function of the stub is to enable both the employer and employee to keep proper track of their payments and deductions.
The categories under which you will find items on the pay stub include the net pay, gross wages and taxes, deductions and contributions. The gross wages include the money owed to an employee prior to making of deductions. It is the structure of the payment that determine how the gross wages are calculated which can either be hourly or salary.
The meaning of PAYE in your pay stub is Pay As You Earn. This is a scheme where deductions meant for Her Majestys Revenue and Customs. The deductions are carried out by employers using the monthly or quarterly P32 payments.
National Insurance is another item that will appear in your pay stub but will take the format NI. The calculation of this compulsory deduction is arrived at by taking a fixed percentage of the employees earnings. Every employee has an NI category which gives the amount payable as the website states.
If as an employee are eligible for statutory maternity pay, this will be reflected in your pay stub as SMP. This payment is made to the eligible employee for a maximum of 39 weeks. Finding Statutory Paternity Pay (SPP) on your stub means that you are entitled to the payment for either one or two weeks in full.
Year-to-Date will appear in your pay stub as YTD. There are times it will be displayed as YTD Earnings. This shows how much you have earned since the year started until the end of the period in question.
When you find the item FT/FTW in your pay stub, it stands for federal tax or federal tax withheld. The federal government is the beneficiary of this deductions that is taken out of your paycheck. Through filling a new W-4 form you can make changes to the amount deducted here.
When you come across ST/STW on your pay stub, you should take that to mean state tax or state tax withheld. This deduction is meant for the state where you are residing. Certain states have no requirement for state income tax.
Social Security or Social Security Tax Withheld will be indicated on your pay stub in the form of SS/SSWT. The government takes this money from your paycheck and keeps it in a social security fund. This money is accessible to people upon attaining a defined age.