What Information Is Available on a Pay Stub?

A pay stub serves as a detailed record of an employee’s earnings and deductions for a specific pay period. It provides transparency regarding how gross wages are calculated and what amounts are withheld before take-home pay. This document is important for personal financial record-keeping, allowing individuals to track income and verify deductions. Employers also rely on pay stubs for accurate payroll processing, tax compliance, and resolving pay-related inquiries.

Employee and Employer Identification

At the top of a pay stub, identifying information for both the employee and the employer is displayed. This section ensures the document is correctly attributed and provides necessary contact details. For the employee, this usually includes their full name, home address, and an employee identification number.

The employer’s information features their company name and physical address. It may also include the employer’s Federal Employer Identification Number (EIN), a unique nine-digit tax ID. This identifying data helps to confirm the legitimacy of the pay stub and is crucial for tax purposes.

Pay period dates, indicating the start and end of the work cycle, are also featured. A separate pay date, the actual day funds are issued, is listed. This distinction helps employees understand the timeframe covered and when they can access wages.

Gross Earnings Details

Gross pay represents the total amount of money an employee earns before any deductions are taken out. This is the starting point for all payroll calculations and encompasses various forms of compensation for work performed during the pay period.

For hourly employees, gross wages are determined by multiplying their hourly rate by hours worked, often broken down into regular and overtime hours. Salaried employees typically see their gross pay calculated by dividing their annual salary by the number of pay periods. Beyond regular wages, gross earnings can include bonuses, commissions, and tips.

Other components that contribute to gross pay might include holiday pay, sick pay, or taxable fringe benefits. Each earning type is itemized, allowing employees to see specific income sources. This breakdown ensures clarity on how the total gross amount was reached.

Pre-Tax and Post-Tax Deductions

Deductions from gross pay fall into two main categories: pre-tax and post-tax, each impacting an employee’s taxable income differently. Pre-tax deductions are subtracted from gross pay before taxes are calculated, which effectively reduces the amount of income subject to federal, state, and sometimes local income taxes. This reduction can lead to a lower overall tax burden.

Common examples of pre-tax deductions include contributions to employer-sponsored retirement plans like a 401(k) or 403(b), which allow employees to save for retirement on a tax-advantaged basis. Health, dental, and vision insurance premiums are frequently deducted pre-tax, as are contributions to Flexible Spending Accounts (FSAs) or Health Savings Accounts (HSAs) used for qualified medical expenses. The IRS sets limits on how much can be contributed to these accounts annually.

In contrast, post-tax deductions are withheld from an employee’s pay after all applicable taxes have been calculated and subtracted. These deductions do not reduce taxable income. Examples often include federal income tax withholding, which is determined by the employee’s W-4 form and current tax brackets.

State and local income tax withholdings also fall under post-tax deductions, varying by location. Federal Insurance Contributions Act (FICA) taxes, comprising Social Security and Medicare taxes, are mandatory post-tax deductions. Social Security tax is 6.2% of wages up to an annual wage base limit, while Medicare tax is 1.45% of all wages, with an additional 0.9% Medicare tax on earnings above certain thresholds.

Other post-tax deductions can include wage garnishments, which are court-ordered withholdings for obligations such as child support or student loan repayments. Voluntary post-tax deductions might encompass union dues, charitable contributions made through payroll, or repayments for company loans. Roth 401(k) contributions are another example, as they are taxed upfront but offer tax-free withdrawals in retirement.

Net Pay and Year-to-Date Summaries

Net pay, often referred to as “take-home pay,” is the amount an employee receives after all deductions have been subtracted from gross pay. It is the final figure on a pay stub, representing funds deposited into a bank account or issued as a check. The calculation is straightforward: Gross Pay minus all Deductions equals Net Pay.

Pay stubs also provide Year-to-Date (YTD) summaries, which accumulate all earnings and deductions from the beginning of the calendar year up to the current pay period. This running total offers a comprehensive overview of an employee’s financial activity. YTD figures are typically displayed for gross wages, taxes withheld, and various deductions.

The importance of YTD figures lies in their utility for financial planning, budgeting, and tax preparation. They allow employees to track annual income and contributions, helping them monitor financial goals and prepare for tax season. YTD tax withholdings help ensure enough taxes are paid to avoid underpayment penalties.