Guide to Pay Stub Deduction Codes
It is safe to say that both employer and employees have been having a difficult time trying to navigate the pay stub world because it concerns both of them. If you have been encountering pay stub deductions codes for quite some time but you still don’t understand a thing about them, you should be consoled by the fact that you are not alone. The good news is you just need a little basic knowledge and all your troubles will go away. This article will educate you on the different types of pay stub deduction codes and what they are used for.
Everyone understands the importance of paying taxes but to ensure you are actually paying, your employer deducts money directly from your pay stub which are usually listed by a series of codes indicated as deductions. One of the most common pay stub deduction code you will often see on your pay stub is federal income tax which is a tax levied on all working adults working in the country; you have no say about this.
The different states in American are levying state income tax on top of the federal income tax; this pay stub deduction code may appear on your pay stub in initials or clearly including all the details. Federal Insurance Contribution Act or social security but will appear on your pay stub as FICA is another pay stub deduction code; this requires you to contribute six point two percent of your paycheck towards this system and so will your employer.
As you continue analyzing your pay stub you will come across a deduction called Medicare which of course is another type of social security although it is specifically allocated for Medicare use. Medicare is a one point five percent deduction of your pay that is meant for only Medicare and nothing else. Finally there will be monthly deduction towards contribution of the various benefits that your employer may be offering.
By now you understand that different employees offer different benefits which you can enlist for or choose the one you want knowing the contributions will be deducted from your paycheck monthly and will appear differently on your pay stub. Pay stub is not as intimidating as it usually seems but if you are not satisfied you can read and research further for your satisfaction. These are the pay stub deduction codes and their various uses.