The pay stub is critical document in your paycheck as it breaks down your monthly earnings and the amount that was reduced to pay for certain expenses such as insurance and taxes. Sometimes it can be confusing to understand the language used in the pay stub because of the use of short forms and coded texts and the following are some of the details you should know about the deductions.
When you get your salary, you will be expected to pay for the Medicare program, and it will fall under the Federal Insurance Contributions Act. The deductions for the Medicare program will be abbreviated as FICA Med Tax which is meant to support those who are above 65 years and also citizens that qualifies for the Medicare.
The FICA SS Tax in your pay stub is meant for the Social Security tax that you pay, which is also instituted in the Federal Insurance Contribution Act. When you pay for the FICA SS tax, you should know that you are supporting those who are disabled and retirees and appropriate time to get the benefits of this program is when you have attained the retirement age of 67 years.
You will notice that your pay stub will contain a section that articulates the amounts that you are supposed to pay for the state taxes in the state tax column. When you live in the states such as Nevada, Alaska, Texas, Washington or Florida, you will not be required to pay state taxes, and when you check your pay stub you will realize that it will have a blank space where you are supposed to pay the state tax. Find out more at this website.
The pay stub will also have a section for federal tax, which should not be confused with Social Security or Medicare deduction, and the amounts will be arrived at after taking consideration of your tax rates and allowances. Before you get a federal tax, some calculations will be done on your pre-tax expenses, retirement contributions, health insurance payments, and employee benefits to arrive at an accurate figure.
Pay stubs for people who live in California are slightly different because they contain State Disability Insurance popularly referred to as SDI. Your employer is supposed to provide you with a certain percentage of your salary when you take family or disability leave known as the Paid Family Leave or Disability Insurance benefits.
When you check your pay stub, you will also notice the section which covers all different types of covers that you may have such as health insurance, cafeteria plan, or retirement plan among others. The best way to ensure that you have a less taxable income is by having health plans as they come before the taxes. The pay stub will vary from one state to the other, but having this necessary information will ensure that you are prepared for the deductions. You can click for more details here.
Learn more about payroll deductions at https://www.youtube.com/watch?v=FS4xTF4mGqo.