Refinancing a Personal Loan in 2024: Essential Tips

pay stubs meaning

Contributions to a flexible spending account are deducted from your pre-tax income. The federal government is entitled to a portion of your income from every paycheck. This is known as your withholding tax — a partial payment of your annual income taxes that gets sent directly to the government. In a payroll period, the taxes deducted from a paycheck typically include Social Security and Medicare taxes, otherwise known as FICA (Federal Insurance Contributions Act). The following taxes and deductions are what you can expect to see on your paycheck, explained in detail below.

If delivered digitally, they must ensure the employee has access to a printer. On the other hand, access states like Ohio and Texas require employers to provide a pay stub that are either electronic or paper. Similarly, in access/print states, employers provide one or the other. The only difference is that employers who receive electronic stubs must have an easy way to access them, namely by printing them.

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The pay stub also mentions which days the employee worked, how much they were paid each day, and their total hours. The “year-to-date” (YTD) value on a pay stub refers to the total pay stubs meaning amount the employee has earned so far that year. The principle behind federal income tax is that the government withholds a certain percentage of the money you earn in a year.

Be sure to check that the information on your last pay stub of the year matches the information on your W-2 form, which details your wages and taxes paid for the year. Contributions to retirement savings plans such as a 401K plan will also be deducted from your pay. When you sign up for a 401K plan, you select a percentage of your pre-tax salary that you’d like to contribute to your retirement account. This ‘pay stub’ definition fits what is referred to as a ‘payslip‘, ‘pay record’, ‘check stub’, or ‘wage statement’ in various countries. Typically, a paystub is issued to an employee each month, or sometimes each week, depending on how frequently a company pays its staff.

What are pay stubs used for?

Get up and running with free payroll setup, and enjoy free expert support. Once you’ve done your homework and compared rates, term lengths, and fees, it’s time to make a decision. You can refinance with your current lender or bolt for one with better terms. Once you have all the information you need about your current loan, shop around and see what rates and terms you may qualify for with other lenders. If you can lower your interest rate without paying additional fees, it may be in your best interest to take that deal.

The IRS also offers a free tax withholding estimator tool, linked above, to help you avoid paying more at tax time. These tools can also be useful for tax planning purposes, too, allowing you to check your withholdings against their recommendations. You may discover that you’re deducting too much or too little from your check, and change your withholdings accordingly. For example, if employees request a day off, it’ll automatically show up on their pay slip like magic.