What Are the Different Deductions on Your Paycheck that You Have to Be Aware About
There are several things you need to know about what about are deductions on your paycheck as the company you work for would pay you your monthly wage.
As we work in an establishment, part of our objective is to be able to save from the money we earned. As you start making a saving, it is also good to know where the money deducted from us are going, what are these deductions, and how these deductions would affect us in the future. Know that over 7% of your payroll is being withheld by the establishment you are working for various purposes.
Let us give you first an overview about your paycheck deductions, the what and the why of these.
First of all, you have to understand that paycheck deductions do not hold the same on everybody. Generally, paycheck would commonly display the information about total gross, total net, hours worked and total deductions.
Be mindful of the part showing the hours worked, for this is the part of your check that will most likely have an error, and for this, an efficient time tracking method should be taken the time and investment by concerned employer.
Being part of the company that offers direct deposit is a big help on your part, since with this system, employees will be able to keep track of their money and all the deductions made on their paycheck.
Know that tax withholdings are where part of your paycheck goes. Among the taxes that the law requires you to pay are the federal income tax, social security, Medicare and state income tax.
Know that the size of your family and your specific living situation will have a big part in the amount of deductions. Thus, every deduction category has to be observed and that you make sure that the amount deducted is accurate.
It is advisable, to avoid confusion and dissatisfaction on your part, that you avoid comparing your deductions with that of your fellow workers. Be aware that your and the other worker have situations that are unique and specific to each of you, thus you will have different paycheck deductions.
Certain laws maintain certain mandate of a specific tax to be withheld or other laws would specify the amount, and thus, it is advisable to keep your paycheck a private matter that you can only discuss or tell to qualified persons like your spouse, employer, accountant and lawyer.
Be informed that every employer will use a tax guide with different withholding tables and this is provided by the IRS. Being a W4 employee would mean that you will fill up an Employee’s Withholding Allowance Certificate, and this will determine the amount of federal income tax that will be deducted from your salary by the government.