What Type of Information Is Included on a Paycheck Stub?

A paycheck stub serves as a comprehensive record of an employee’s compensation, providing a detailed breakdown of earnings, deductions, and net pay for a specific work period. This document is a tool for understanding how wages are calculated and where money is allocated. It helps individuals verify the accuracy of their compensation and promotes financial awareness.

Essential Identification Details

A paycheck stub includes identification details for both the employee and the employer. It lists the employee’s name, address, and a partial Social Security number or employee identification number. This information is important for accurate record-keeping and tax reporting. The employer’s name, address, and Employer Identification Number (EIN) are also listed. The EIN is a federal tax ID used by the IRS to identify the business.

Understanding Your Earnings

This section details an employee’s gross earnings. It specifies the pay period dates and the pay date. Gross pay is the total amount earned before deductions. For hourly employees, this includes the hourly rate and total hours worked, including overtime, while salaried employees see their regular salary amount. Supplemental earnings such as bonuses, commissions, or tips are also itemized.

Mandatory and Voluntary Deductions

Deductions reduce gross pay to net pay. These can be mandatory, required by law, or voluntary, based on employee elections. Understanding these subtractions is important for financial planning.

Mandatory deductions include federal income tax withholding, which employers subtract from an employee’s gross wages and send to the IRS. The amount withheld depends on the employee’s income and the information provided on their Form W-4. State income tax withholding is also applied in most states. Some localities may also levy local income taxes.

Federal Insurance Contributions Act (FICA) taxes are another mandatory deduction, funding Social Security and Medicare programs. These programs provide retirement, disability, and healthcare benefits. Both employees and employers contribute to FICA taxes. An additional Medicare tax applies to earned income exceeding certain thresholds.

Voluntary deductions are elected by the employee and can be pre-tax or post-tax. Pre-tax deductions are subtracted from gross pay before taxes are calculated, which reduces taxable income. Common pre-tax deductions include contributions to 401(k) retirement plans, health insurance premiums, and Flexible Spending Accounts (FSAs) or Health Savings Accounts (HSAs). Post-tax deductions are taken after all applicable taxes have been withheld. Examples include contributions to Roth 401(k) plans, repayments for certain loans, union dues, and wage garnishments.

Your Take-Home Pay and Cumulative Totals

Net pay, also known as take-home pay, is the amount remaining after all mandatory and voluntary deductions. This represents the actual funds deposited into an employee’s bank account or provided as a physical check. Understanding this figure is important for personal budgeting and financial management.

Paycheck stubs also present year-to-date (YTD) totals. These cumulative figures track earnings and deductions from the beginning of the calendar year. YTD totals are provided for gross pay, each type of tax withheld, and each voluntary deduction. These totals offer a comprehensive overview of financial activity throughout the year, which is beneficial for tax planning, verifying income for loans, and monitoring overall financial progress.