Let the Las Vegas Accountants at FAL Help You Understand Your Pay Stub
For many, the typical pay stub may seem to be just a mass of numbers with the only one that really matters being the “net pay.” Still, all of those numbers do have meaning and should be understood. Reviewing your deductions, hourly pay, benefits, etc with your accountant can help you identify how to maximize earnings and minimize tax liability. Here’s a quick rundown on what you need to know to easily read a pay stub.
The Summary – Pay stubs usually include a quick summary along the top that shows the pay date, the pay period, the SSN of the employee and the net amount of the check. More detailed info is related in the following sections.
The Pay Section – A typical pay stub will have four columns here – description, hours, rate and total. It is usually straightforward as your regular, overtime, sick or vacation hours will be itemized in the first column. The number of hours goes in the second. Then your rate of pay in the third. Finally, the math is done for you and a total is calculated.
The Deduction Section – This area details the various items deducted for federal, state and, in some cases, local income taxes. In addition, you will find also find two lines labeled FICA SS and FICA Med. These two line items are your contributions to Social Security and Medicare. Lastly, if you have are enrolled in a company sponsored insurance plan, the deduction will show up here. By reviewing this with your accountant, you can ensure you are claiming the appropriate items to help avoid a large tax bill at the end of the year you were not expecting.
Vacation/Sick/Personal Time – Many companies also choose to keep their employees informed about their benefits time on the pay stub. There is generally a box – offset from the rest of the items – that details this information.
The Bottom Line – At the bottom of almost every pay stub is another general summary area that shows the gross pay – that is, the amount before any deductions – and the net pay. This last number is what will actually hit your bank account if you have direct deposit or which will be reflected on the physical check you receive.
Not sure if you’re declaring the right amount of dependents? Call the Las Vegas accountants at FAL to review your pay stub and financial situation to make sure you are positioning yourself the best possible way. Call 702-870-7999 to make an appointment.