What Are the Different Deductions on Your Paycheck that You Have to Be Aware About
It is important to know more about the various deductions that a company you work for would deduct on your paycheck as you are given your payroll.
As we work in an establishment, part of our objective is to be able to save from the money we earned. As you start making a saving, it is also good to know where the money deducted from us are going, what are these deductions, and how these deductions would affect us in the future. Every employee should be aware that the 7% plus of the money you earned and being paid by the company you are working for are withheld through payroll deductions to serve different purposes.
Before anything else, it is important to get an overview of what and why are these paycheck deductions.
The first thing to be aware of is that not everybody will have identical payroll deductions. Typically, a paycheck would contain the following information, which are the total gross, total net, hours worked and total deductions.
The most likely to have an error on that part of your check is the hours worked portion, where your employer should be able to take the time in investing methods that will efficiently track the time.
It will be helpful on your part if your employer can offer a direct deposit system, for this will become a safe and great way to keep tabs on your earnings and all the deductions made from you.
Deductions for your tax withholdings are part of your standard payroll deductions. As requirement of the law, it is a requirement that you pay for the federal income tax, social security, Medicare and state income tax.
Be aware that what will play a big role on how much amount will be deducted from your paycheck are your specific living situation and the size of your family. And so, knowing what are these deduction categories are and making sure that the amount taken is accurate, is important.
One thing to remember though is to avoid comparing your deductions with your co-employees, for you may end up dissatisfied and confused. Be aware that your and the other worker have situations that are unique and specific to each of you, thus you will have different paycheck deductions.
Know that some laws determine the amount of deduction and certain laws would have a mandatory specific tax to be withheld, and so, it is better that you consider a private matter your paycheck matter, and maintain only people like your spouse, employer, accountant and lawyer, to be the only ones to know about it.
Be informed that every employer will use a tax guide with different withholding tables and this is provided by the IRS. Being a W4 employee would mean that you will fill up an Employee’s Withholding Allowance Certificate, and this will determine the amount of federal income tax that will be deducted from your salary by the government.