Understanding Your Pay Statement

Understanding a pay stub: a comprehensive guide for employees Workable

Before we get into the nitty-gritty, let’s start with the basics. A pay stub, also known as a paycheck stub or earnings statement, is a document that accompanies your paycheck. It provides a detailed breakdown of your earnings and deductions for a specific pay period. This section of a pay stub details the employer’s contributions to benefits such as health insurance, retirement plans, and other perks. Employees must recognize these contributions as part of their overall compensation package.

Pay Period Dates

The total gross pay represents the full amount earned during the pay period before any deductions or taxes. This includes regular wages, overtime, bonuses, and any additional income earned during the period. Many employers include a similar listing for contributions to retirement savings plans and health plans. You’ll generally see these fields marked as the acronym “YTD” (year-to-date) on your pay stubs. Depending on the benefits offered by your employer, you might make contributions to retirement, insurance premiums, or savings accounts from your pay.

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In states that do impose it, the amount withheld depends on factors similar to federal income tax, including income and filing status. A Pay Statement offers employees the opportunity to view their pay stubs online. You can verify leave balances and deductions with the click of a mouse. You also are able to see the reported attendance from each work location and position. Yes, creating pay stubs is commonly used as proof of income when applying for loans, mortgages, and rental agreements. Make sure to keep recent paycheck stubs handy for these purposes.

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Employees should keep records of their vacation time throughout the year and compare it to what is on their pay stub. When paychecks arrive two weeks after time off has been taken, it is easy for employees to lose sight of their paid time off and believes they have more than they do. Pay rate is the number of man hours and the hourly, weekly, and monthly rate for a particular pay period.

Pay rate

This tax form is one of the fillable tax forms provided by the Internal Revenue Service, to help taxpayers reduce their tax preparation costs. To see more forms like this, visit our free fillable tax forms page, where you’ll also find articles like this. Includes the Understanding Your Pay Statement amount of state income tax calculated for the income reported in Box 17. Use this code to report the total amount of permitted benefits under a qualified small employer health reimbursement arrangement (QSEHRA).

• If you’re paying towards a workplace pension that your company has set up or arranged access to, the amount you’re contributing will be shown.
• For a complete understanding of all the abbreviations found on your pay statement contact the payroll department at the district office.
• Regular checks ensure correct payment and understanding of benefits.
• It is proof of payment by the employer and comes in handy for financial recording and bookkeeping processes.

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For hourly workers, this includes number of hours worked and the hourly rate. For salaried employees, it’s typically the total salary for the pay period. Numerous deductions are typically withheld from an employee’s gross salary, impacting the final take-home amount.

• This includes identification details of both the employee and the employer, such as names, addresses, and sometimes employee identification numbers.
• The Social Security portion (OASDI) is withheld at a rate of 6.2% from an employee’s gross wages, up to an annual wage base limit, which is $176,100 for 2025.
• Some employers will list each expense payment separately on the payslip.
• It shows what you earned, what was deducted (items like taxes or benefits), and what you actually get to take home (your net pay).

Understand how your basic earnings are adjusted by taxes and other deductions to determine your final take-home pay. The information is intended for working Canadians and not just payroll professionals. We’ve taken complex information and made it easier to understand – for all levels of pay expertise.

Having trouble accessing your Pay Statement?

One of the most important documents you’ll encounter in your employment journey is the pay stub. Many employees overlook employer contributions when evaluating their compensation. These contributions can significantly enhance a benefits package overall. For example, employer matches to a retirement plan can boost retirement savings substantially over time.

Employees need pay stubs when applying for loans, mortgages, or rental housing as well. They can use this as proof of income when applying for government assistance programs. Employers must give employees a pay stub for each pay period, which is a legal record they must keep for at least 3 to 7 years. Net pay, also known as take-home pay, is what remains after all deductions and taxes have been subtracted from your gross pay.