How To Read Your Pay Stub
It is crucial that you the meaning of the abbreviations that form part of your pay stub. The stub is a part of your paycheck that gives in detail your entire pay. In majority of states it is legally required for employers to avail the pay stubs to their staff. The details that are included in the document are meant to help you and your employer to monitor the payments and deductions.
The details in the pay stub will be categorized as gross wages, taxes, deductions and contributions and lastly the net pay. Money that is owed to the employer before deductions are taken out is referred to as gross wages. Depending on whether your payment is made on an hourly or salary basis, the way the gross pay is calculated will differ.
The acronym PAYE found in your pay stub means Pay As You Earn. This is a scheme where deductions meant for Her Majestys Revenue and Customs. This is done through the employees monthly or quarterly P32 payments.
National Insurance is another item that will appear in your pay stub but will take the format NI. The calculation of this compulsory deduction is arrived at by taking a fixed percentage of the employees earnings. The NI falls into different categories for each employee.
In case you have met the conditions to qualify for statutory maternity pay, you will find this appearing on your pay stub as SMP. This payment is made to the eligible employee for a maximum of 39 weeks. Finding Statutory Paternity Pay (SPP) on your stub means that you are entitled to the payment for either one or two weeks in full.
When you come across YTD in your pay stub, you should take that to mean Year-to-Date. There are times it will be displayed as YTD Earnings. This shows how much you have earned since the year started until the end of the period in question.
The federal tax or the federal tax withheld will be shown in your pay stub as FT/FWT. This is a deduction that is made on your paycheck and is remitted to the federal government. Through filling a new W-4 form you can make changes to the amount deducted here.
When you come across ST/STW on your pay stub, you should take that to mean state tax or state tax withheld. The state where you are a resident is the beneficiary of this deduction. Depending on a particular state, there is no requirement to pay state income tax.
Social Security or Social Security Tax Withheld will be indicated on your pay stub in the form of SS/SSWT. The government takes this money from your paycheck and keeps it in a social security fund. Upon reaching a certain you can access the funds.