When you go through your paycheck, you will realize that it has information which contains the deductions and the amount that you made in a particular month. Sometimes it can be confusing to understand the language used in the pay stub because of the use of short forms and coded texts and the following are some of the details you should know about the deductions.
The first deduction you will get in your pay stub is the contribution of the Federal Insurance Contribution Act, which takes care of the Medicare program. When you see the FICA Med Tax abbreviations, then you should know that you are paying for the Medicare program insurance, which facilitates those who are above 65 years and people that qualify for Medicare insurance.
You will also come across the FICA SS Tax, which stands for the Social Security program deductions that you make, which are registered under the Federal Insurance Contributions Act. The deduction is meant to support those who are disabled, retirees and you can only claim them when you are past the age of 67.
If your state levies income tax, then your pay stubs will have a detailed section which dictates the amount you are required to pay for the state tax. When you live in states such as Texas, Alaska, Nevada, Florida or Washington, you will notice that you will not be required to pay for state tax and it will be blank.
You will also be required to pay federal tax which does not entail Medicare or Social Security and the amount vary significantly for every citizen depending on the number of their allowances and tax rate. Before you get a federal tax, some calculations will be done on your pre-tax expenses, retirement contributions, health insurance payments, and employee benefits to arrive at an accurate figure.
Pay stubs for people who live in California are slightly different because they contain State Disability Insurance popularly referred to as SDI. When you apply for a family leaves or disability leave days, you will be required to get a portion of your salary to cater for the leave.
You should look out for the miscellaneous deduction on your pay stub, which highlights other expenses such as their retirement, cafeteria plan, and other health insurance plans you have. Signing for most of these plans can ensure that you reduce the amount that you will be taxed. The pay stub will vary from one state to the other, but having this necessary information will ensure that you are prepared for the deductions.