What Does the ERMED Code on My Paycheck Mean?
Demystify your earnings statement. This guide helps you understand the ERMED code and all other essential details on your paycheck.
A paycheck, or pay stub, details an employee’s earnings and all deductions for a specific pay period. Reviewing your pay stub regularly helps you verify accurate payment and withholding amounts.
Gross Pay and Net Pay
Gross pay represents your total earnings before any deductions are subtracted. This amount includes your regular wages or salary, along with any overtime, bonuses, or commissions earned during the pay period.
Net pay, often referred to as “take-home pay,” is the amount you actually receive after all deductions have been withheld. The calculation is straightforward: Gross Pay minus Total Deductions equals Net Pay.
Mandatory Deductions
Mandatory deductions are amounts legally required to be withheld from your earnings. Federal Income Tax is one such deduction, with the amount withheld influenced by the information you provide on IRS Form W-4, “Employee’s Withholding Certificate.” This form guides your employer on how much federal income tax to deduct.
State Income Tax is another common mandatory deduction, though its applicability varies depending on where you reside. Most states impose an income tax, with withholding calculations similar to federal taxes. Some cities or counties may also impose Local Income Tax, which is a specific tax collected by the local government where you live or work.
Social Security and Medicare taxes, collectively known as Federal Insurance Contributions Act (FICA) taxes, are also mandatory withholdings. For 2025, the Social Security tax rate is 6.2% for both employees and employers, applied to earnings up to a wage base limit of $176,100. This tax funds the Old-Age, Survivors, and Disability Insurance (OASDI) program.
The Medicare tax rate is 1.45% for both employees and employers, with no wage base limit on earnings. This portion of FICA funds health benefits for eligible individuals.
Voluntary and Other Deductions
Your paycheck may also include various voluntary and other deductions. Health insurance premiums, for example, are a common pre-tax deduction, reducing your taxable income before federal and state taxes are applied.
Retirement contributions, such as those to a 401(k) or 403(b) plan, are also frequently pre-tax deductions. For 2025, the maximum employee pretax contribution to a 401(k) increases to $23,500, with catch-up contributions for those age 50 or older remaining at $7,500. Life insurance and disability insurance premiums may also be deducted.
Other deductions can include union dues, if applicable, or wage garnishments. A garnishment means a state court or the federal government has mandated a portion of your earnings be withheld to satisfy a debt, such as child support or a student loan. Charitable contributions you elect to make through payroll deduction would also appear in this section.
Understanding Additional Paycheck Information
Your pay stub contains other important information. Year-to-Date (YTD) figures are a significant component, showing the cumulative totals for your earnings, taxes, and deductions from the beginning of the calendar year to the current pay period. YTD earnings reflect your total gross income earned so far.
The pay period dates, indicating the start and end dates for which you are being paid, are also clearly listed. Employee personal information, such as your name, address, and employee ID, along with employer identification details, are also listed. Pay stubs often use abbreviations to save space, with common examples including “FED” or “FWT” for Federal Withholding Tax, “ST” or “SIT” for State Income Tax, “SS” for Social Security, and “MED” for Medicare.