Review your Paycheck with this Guide

ByIGNITE On Purpose

Many folks don’t thoroughly analyze their paycheck. Like me, most people check their bank account for that deposit and then start spending. However, a closer look is in your best interest as an employee. Here are several things that you should verify with each check to ensure that your pay is accurate, and you do not have any issues come tax time. 

First, if hourly, ensure the hours you worked are accurate. If on salary, verify your pay-period amount is correct. To calculate your per-pay-period salary, take your annual salary and divide by the number of checks you receive a year (24 for semi-monthly, 26 for bi-weekly or 12 for monthly). Also verify any other items you see listed under earnings and never hesitate to ask questions if you are not sure what each item is.

paycheck-deductions

Below are some common items you might find under earnings:

  • GTL (Group Term Life) – A benefit provided by the employer. Although, anything over $50,000 is considered taxable earnings by the IRS. If applicable, this would be a smaller amount based on age. 
  • PTO, Vacation, Sick, Bereavement, etc. – Time-off earnings
  • Employer paid medical benefits
  • Car, cell phone, internet, etc. allowances – these may also be listed as a negative deduction depending on your company
  • Second, look at the taxes being deducted from your check. Depending on state and local taxes there may be quite a few listed. 

Here are some you may see:

  • Social Security Tax – 6.2 percent up to $142,800 earnings
  • Medicare – 1.45 percent (0.9 percent additional on earnings over $200,000)
  • Federal Tax Withholding – Based on elections
  • State Tax — Both lived-in and worked-in, if those are different
  • Locality Tax — Based on your city or township, there may be additional taxes

Lastly, review the benefits being deducted to be sure it is what you enrolled in and that you are aware of the frequency of the deductions. 

Here are some common deductions:

  • Retirement (401k, 403b, etc.)
  • Medical
  • Dental
  • Vision 
  • Life Insurance

Unfortunately, payroll errors do happen but can be corrected much easier when caught early. Be proactive when it comes to your pay and taxes and contact your payroll department if you ever have any questions.

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