When starting a new job, your paycheck is probably the first thing on your mind. It can be difficult to anticipate what your take home pay will be since taxes and deductions can vary based on a number of things. It’s important to review each paycheck you receive to ensure you’re getting exactly what you’re owed. Here are a few things to check for.
Gross pay
This is the amount of money you earned before taxes.
Net pay
This is the amount of money you actually get to take home after taxes and deductions are taken out.
Hours worked
If you’re an hourly employee, you’ll be able to see how many hours you worked during a pay period on your paycheck.
Deductions and taxes
Every paycheck will have deductions taken out of it for taxes, insurance, or other benefits. Taxes can include federal tax withholding, social security taxes, medicare, state taxes, and local taxes. Deductions for benefits could include retirement, insurance costs, and any other benefit costs required by your employer.
Things to check when receiving your paycheck
Now that you understand what each field on your paystub means, there are a few important things to look out for when you review it. First, it’s important to make sure that everything looks correct. Did you get paid for all the hours you worked? Does your salary or hourly rate look correct based on what you were told when you were hired? Do your deductions look correct?
Depending on the benefits offered by your company, your deductions might look a bit intimidating at first. Sometimes, a paycheck might list company-paid deductions, which means they are the responsibility of your employer. Be sure to review these so you understand which benefits are your responsibility and which are your employers. It’s also important to confirm that the benefits you’re paying for out of your paycheck are actually ones that you selected.
If you made any changes that might impact your paycheck recently, such as a change of address or an updated retirement contribution amount, make sure the change is being reflected on your pay stub. Changes like this can impact you come tax time if you’re not careful. For instance, if you moved and your local taxing information was not updated by your employer, local taxes will be withheld incorrectly.
Everyone makes mistakes from time to time, even payroll departments, so it’s important to review your pay stub every pay day to ensure your information, hourly rates, and pay are correct. If you think you’ve caught a mistake, be sure to point it out to your company’s payroll department as soon as possible so they can fix it.
