Getting paid is one of the best feelings! All of your hard work from the previous pay cycle is finally being rewarded and you can now pay for your necessities and even treat yourself.
While paychecks are exciting, you should look at them as more than just spending money. There’s actually a lot of information that comes along with it that you should be aware of, such as your paystub. But before you can do that, you first need to know what they look like so you can act accordingly.
So what does a pay stub look like? Keep reading to find out the purpose that they serve.
What Is a Pay Stub?
A pay stub is a small document that’s attached to the actual paycheck. It can be removed, since it’s connected through perforation, and its goal is to outline the details of payment. Pay stubs are tools that help employees keep track of their income throughout the year.
Paycheck stubs breakdown every detail of your check, and as helpful and important as they are, they’re not required in every state.
What Does a Pay Stub Look Like?
This little document may appear to be bland but it’s actually full of information. Pay stubs are the same color as the paycheck you receive and are filled with categories and number breakdowns.
They include standard information such as name, employee identification, pay period, hours, pay, and deductions. Some even include accrued sick and vacation time which can help you better manage your paid time off.
Key Components
While all the information matters, there are certain sections that deserve more attention. They include the following: tax deductions, net and gross pay, and 401k deductions.
Several tax deductions are taken out such as federal, state, local, and FICA, which include social security and Medicare. Overall, you can expect to see a deduction of about 22 percent from taxes on each paycheck.
Net and gross pay deal with your earnings. While gross is the amount of money you earned during the pay period, net is the amount you take home.
Lastly, your 401k is your retirement savings. You can allot a percentage of each paycheck to get put into this account and depending on where you work, the company may match your earnings after a period of time.
Basically, employment pay stubs detail the work that’s done to bring your gross pay down to your net pay. All of these components are important because they’re needed to either file taxes or go towards your future.
Why They’re Helpful
Pay stubs are a great tool to help you ensure that you’re being paid your full amount and they help you track your finances throughout the calendar year.
Not all places provide them for employees but if you’re a business owner that does, make sure to use a quality paycheck stubs generator when creating them to draft accurate documents. Inaccurate stubs can cause problems for both the company and the employee which could result in financial penalties.
Pay Stubs Made Easy
The question of ‘what does a pay stub look like?’ is so important, because it’s a step in the right direction towards becoming financially literate.
Everything related to your pay is important, even if it may be a difficult concept to grasp at first. We hope that our guide helped you better understand what a pay stub looks like and what to pay close attention to.
Your paycheck is much more than the money you earned, it can impact your life in more ways than one.
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