Guide to Pay Stub Deduction Codes
Employees have been having a hard time trying to figure out pay stubs but it is not only a challenge to them but employers who have to handle them too. Regardless of the position you hold within a business or company, don’t feel bad about yourself if you are still trying to understand the details of pay stub deduction codes because it is a problem most people are encountering. Lucky for you, pay stub deduction codes are simpler than you think and you just need someone to point you in the right direction. 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. Given you are adult earning an income in the America, it is your responsibility to pay federal income tax which is one of the pay stub deduction codes you will see on your pay stub; you have no choice whether to pay this or not.
Another pay stub deduction code likely to appear on your pay stub is state income tax which is levied by almost all American states except seven which go about it in a different way. Social security as it is commonly known but will appear on your pay stub as deduction called FICA is another deduction code; this is paid by both employees and employers, commanding up to six point two percent of what you earn monthly.
Besides the aforementioned pay stub deduction codes, you will see another designated as MED, FICA MED or FIM and is part of the social security the only difference is it doesn’t go into the pot because it is set aside for Medicare only. Medicare is a one point five percent deduction of your pay that is meant for only Medicare and nothing else. At the bottom end of you pay stub you will see pay stub deduction codes for any benefits extended by your employer and you are a part of; deductions will be made monthly.
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. You can continue reading and researching other articles and blogs about pay stubs to become an expert and learn what your pay stub should look like. Discussed above is what pay stub deduction codes and what they are used for.