How to Read a Pay Check Stub

Some people mistakenly fail to review their pay stub after receiving their check from an employer. If you begin to learn how to read the different deductions from your check stub, you can better budget your money and know what to expect your net amount to be each time you get paid. Although your employer will decide what exactly is printed on your pay stub, most businesses will include the same basic elements.

Familiarize yourself with any abbreviations that may appear when you read a pay stub. Popular abbreviations include YTD (year to date), FT or ST (federal tax or state tax), Med (Medicare) and SS (social security).

Start by reading the payment amounts. The gross pay will be the total amount that you earned during that particular pay period. The net pay is the actual amount that you take home with you.

Move on to the tax figures listed on your pay stub. The federal tax amount is the payment that you made to the federal government while the state tax figure is the money that you must pay the state government to cover your taxes.

Read the withholdings made by Medicare and Social Security on your paycheck stub. Each employee must pay approximately 1½ percent to Medicare for future retirement medical benefits and a little more than 6 percent for Social Security payments made after you retire. This rate can be changed by the government at any time.

Consider the year-to-date field on your check stub. This is usually found next to each deduction and will let you know how much you have paid toward each category so far this year.

Look for other deductions included on your paycheck stub. Any type of contributions you make will also be listed on a pay stub. These may include union dues, 401k contribution amounts, insurance deductions and pension plans.