How to Understand your paycheck Video by workforce studios As you watch this video, look at the format of this paycheck. Is it similar to your paychecks or to a parent’s paycheck? PAYSTUBS ARE IMPORTANT & you should use them to verify that each paycheck is correct by using your stub data. Is your rate, total of hours, Social Security number, & amount withheld all correct? Banks typically ask for paystubs when you go to apply for a loan. It doesn’t matter if you are paid by Direct Deposit or by a paper check. You have an Earnings Statement (‘paystub’) that lists the earning details, totals, and lists all of your withholdings. If your ‘paystub’ is online, be sure to access it, verify the info, and save or print.

Hours: Number of hours that are paid with this paycheck Payee’s name: Person that this check is paid to and employee i.d. number Pay Period – Dates when the money was earned (may not be the date you receive the check) Hours: Number of hours that are paid with this paycheck Rate: Amount paid for every hour paid with this paycheck Gross Pay: Amount of money made before taxes are subtracted (This Period means for this check only) YTD: Amount of money totaled for each YTD paycheck item for the entire calendar year Required Deductions: Taxes that employers are required to withhold and send to the government. This Period amounts are shown for this check and YTD totals are shown. Net Pay: Amount you receive after taxes and deductions are taken out. Take-home-pay (This Period and YTD are shown) YTD total too 50 hrs x $9 hr = $450 *here is where you make sure you have been paid correctly. YTD total too $450 - $6.08 - $25.92 = $418 *here is where you make sure your withholdings are correct.

Think about this Taxes provide money for the government to operate and provide services to us, all.  We may complain and say, “I would have more money if I didn’t have to pay taxes.” And, none of us like to pay taxes with our “hard-earned” money.  Taxes certainly do lower our net-income.  But, we also need and want what our taxes pay for – education, police and fire protection, roads, parks and other kinds of services.  - cicmoney101.org

Withholdings: taxes that come out of your pay An employer is required to withhold taxes and send the tax in for their employees. These include state and federal income taxes, as well as Social Security and Medicare taxes. While your employer may handle many of the details, it's important for you to know what you're paying and why. (Charles Schwab MoneyWise) INCOME TAX FICA TAX Our country is on a pay-as-you-earn system of us paying taxes– thus the reason a small part of our income tax comes out of each paycheck. A percentage of our income is withheld and sent to the Georgia Department of Revenue to pay our state income tax. A percentage of our income is withheld and sent to the Internal Revenue Service (IRS) to pay our federal income tax. Income taxes may be refundable. FICA taxes are not refundable. Federal Insurance Contributions Act Social Security tax pays for the retirement and disability benefits received by millions of Americans each year. Medicare tax goes to pay for medical benefits for people over 65 years of age These taxes may seem bothersome now, but FICA tax withholding is intended to give you somewhat of a safety net when you reach retirement.

W-4 is a federal form from the IRS (Internal Revenue Service) W-4 is a federal form from the IRS (Internal Revenue Service). You complete this form so that your employer withholds the correct amount of federal income tax from each paycheck. Click on the form photo to see the entire form. Click the IRS button below for help with completing your Form W-4. G-4 is a state form from the GA. Department of Revenue. You complete this form so that your employer withholds the correct amount of state income tax from each paycheck. Withholding forms: These forms help your employer withhold the correct amount of income tax.

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