Paychecks |
Understanding your paycheck. |
METHODS FOR PAYING EMPLOYEES
Paper Paycheck: A check you get on paper that you can physically take to the bank
Direct Deposit: Method used for employees who put their paycheck into the back the day they get it- there is no need for finding the deductions, as that is already done for you.
Payroll Card: The third and newest method to pay employees. It is a prepaid card that is offered to employees as an alternative to paper paychecks or directly depositing wages into an employee’s depository institution account.
Paper Paycheck: A check you get on paper that you can physically take to the bank
- Characteristics: most common method, provides the employee with his or her paycheck, shows the deductions, and the employee is responsible for handling the paycheck
Direct Deposit: Method used for employees who put their paycheck into the back the day they get it- there is no need for finding the deductions, as that is already done for you.
- Characteristics: Secure and easy to use.
Payroll Card: The third and newest method to pay employees. It is a prepaid card that is offered to employees as an alternative to paper paychecks or directly depositing wages into an employee’s depository institution account.
- Characteristics: Smart card - Have money electronically loaded onto them each pay period with funds automatically deducted from the balance when a purchase is made. Function like debit cards.
EmploymeNT Forms
PAYCHECK STUB
DEDUCTIONSFederal Withholding Tax: The amount required by law for employers to withhold from earned wages to pay taxes. This represents the largest deduction withheld from an employee’s gross income. The amount withheld depends upon two things: the amount of money earned and the information provided on the form W-4.
State Withholding Tax: The percentage deducted from an individual's paycheck to assist in funding government agencies within the state. The percentage of deduction depends upon the amount of gross income the employee has earned. FICA(Federal Insurance Contributions Act): United States payroll (or employment) tax imposed on both employees and employers to fund social security and medicare. Fed OASDI/EE or Social Security: The nations retirement program. This tax helps provide retirement income for elderly and pays disability benefits. Social Security taxes are based upon a percentage of the employee's gross income. Fed MED/EE or Medicare: The nation's health care program for the elderly and disabled. This tax provides hospital and medicine insurance to those who qualify. Retirement Plan: The amount an employee contributes each pay period to a retirement plan. A specified percentage of the contribution is often matched by the employer. This may be a 401k, state, or local retirement. Medical: The amount taken from the employee’s paycheck for medical benefits. This occurs when the employer has a medical plan for employees, but does not pay full coverage for his/her benefits. |
Paycheck stub: A paycheck stub list the paycheck deductions as well as other important information.
Personal Information: States the employee’s full name, address, and Social Security or Employee Identification number. Gross Pay: The total amount of money earned during the pay period before deductions. If a person earns an hourly wage, gross pay is calculated by multiplying the number of hours worked by the wage. Net Pay: The amount of money left after all deductions have been withheld from the gross pay earned during the pay period. Deductions: This is the amount of money that is subtracted from the gross pay for other taxes, medical benefits, or retirement benefits. TAXESTaxes: Compulsory charges imposed on citizens by local, state and federal governments used to fund public goods and services
Internal Revenue Service: The governmental agency responsible for collecting federal taxes, issuing regulations, and enforcing tax laws written by the United States Congress If you need help figuring out how to figure your final paycheck amount--watch the video below!
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For more information on deductions and how to calculate your paycheck amount, check out this link---
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