Tax Tips & Calculators

Paycheck stubs contain a lot of information – from federal income tax withheld to vacation balance. All paycheck stubs show your gross pay – the total amount you earned before any taxes were withheld for the pay period. Paycheck stubs also show your net pay – the amount of your check after all withholdings.

Common Paycheck Stub Items

Federal Tax

Federal income tax might be abbreviated as Fed Tax, FT, or FWT. This amount is credited against any tax you’ll owe the federal government when you file a return. The amount withheld from your pay depends on:

• If you´re married or single
• How many allowances you claim on the Form W-4 you filed with your employer

If you´re married, you can withhold at the higher single rate.

State & Local Tax

State income tax might be abbreviated St Tax, ST, or SWT. Your paycheck might also show the abbreviation of the state for which tax is being withheld (Ex: IL tax).

Depending on where you live, you might:

• Not have state withholding
• Have withholding for more than 1 state – the state you live in and the state(s) you work in

The amount withheld from your pay depends on:

• If you´re married or single
• How many allowances you claim on the state equivalent of Form W-4 you filed with your employer

Local income tax might be withheld on wages earned inside city, county, and school district boundaries. If you live or work in a jurisdiction that levies a tax, wages will be taxed by that jurisdiction.

Social Security and Medicare tax

Social Security tax might be abbreviated FICA, SS, SSWT, or OASDI. Even if you have $0 withheld for federal, state, and local income taxes, you usually must have Social Security and Medicare taxes withheld.

If you earn at least a specified amount for at least 40 quarters, you´ll be able to receive Social Security benefits when you retire. Each employer withholds 4.2% of your gross income for Social Security – up to income of $106,800 for 2010. Your employer is required to pay 6.2% for you that doesn´t come out of your pay.

Note: The reduced 4.2% Social Security tax rate is just for tax year 2011. This percentage will revert back to 6.2% beginning Jan.1, 2012.

Medicare tax might be abbreviated MWT or Med. This amount is withheld so you´ll be covered by Medicare when you reach age 65. The amount withheld from your pay is 1.45% of your gross income. Your employer pays an additional 1.45% that doesn´t come out of your paycheck. There are no income limits on Medicare tax, so all covered wages are subject to Medicare tax.

Year-to-date

Your paycheck stub might also show year-to-date totals. This information is good to have, especially if you´re trying to estimate if you´ll have a refund or balance due at the end of the year.

Save the last paycheck stub to compare with your W-2. The amounts on the last stub and the W-2 amounts usually should match. However, your employer might have added additional amounts for additional benefits offered that are taxable income to you. Ex: Employer-provided free tax preparation services or recognition prizes. Contact your payroll department if there are any differences.

Other Items

Your paycheck stub might show deductions for health or life insurance. If it does, your stub might show if the premiums were deducted before tax or after tax. Before-tax deductions will reduce the income you pay taxes on to federal, state, and local governments.

Some employers offer their employees the chance to contribute to retirement plans, like 401(k)s. Others offer childcare or adoption assistance. Your stub will usually show deductions for such items if you chose to take advantage of them.

If you have questions about other amounts on your paycheck stub, check with your manager or your human resources department.