Understanding Your Check Stub
Every two weeks you get your paycheck and each one is immediately put into your bank and dispersed to all the various bills without much thought to your check stub. Rather than ignorantly dumping the funds each paycheck, it’s beneficial to look at your pay stub to see what your payouts were and where they went. You might feel you were paid less than you should have been. There is most likely an explanation for this if you look closely at your pay stub. On the flipside, if your employer made a mistake on your pay stub, it is easy to spot if you understand what you’re looking at.
Top of the pay stub
This area of your pay stub is where you will usually find the pay stub date as well as the address and information of your employer. Below you will find the number of hours you worked, the rate at which you were paid and the gross pay amount. This number will be more than what your paycheck was for because this is the amount you made before taxes and deductions.
Net pay and deductions
As you examine your pay stub further, you will notice where state and federal taxes were deducted along with social security and Medicare. Your federal tax amount varied depending on how many exemptions you claimed when you filled out your W4 form offered by your employer. After all these numbers have been subtracted, you will find “net pay” and this is the amount your paycheck was written for.
What does “YTD” mean?
You might find an area on your pay stub with YTD and some amounts. This means “year to date” and is how much you have received from your employer that year. You will see your YTD gross earnings, YTD deductions and YTD net pay. This will help you keep track for your personal records.
If your employer offers insurance or retirement options, you will also see these amounts deducted from each paycheck if you have signed up for them. Paid time off, or PTO, balances are also on your paycheck and as you earn them, these hours will grow from paycheck to paycheck if you do not use them.
Create pay stubs for your own small business
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