How To Read Your Pay Stub
It is important to have knowledge of the items that are included in your pay stub. The stub is a part of your paycheck that gives in detail your entire pay. Employers are obligated by law to provide the pay stubs to their staff. The details that are included in the document are meant to help you and your employer to monitor the payments and deductions.
The details in the pay stub will be categorized as gross wages, taxes, deductions and contributions and lastly the net pay. The gross wages represent the amount payable to the employee before any deductions have been made. It is the structure of the payment that determine how the gross wages are calculated which can either be hourly or salary.
The acronym PAYE found in your pay stub means Pay As You Earn. This is a program where tax deductions from workers are collected on behalf of Her Majestys Revenue and Customs. This is done through the employees monthly or quarterly P32 payments.
The other item you will find in your pay stub is the NI which stands for National Insurance as you discover more. This is a fixed percentage of the employees earnings which is a compulsory deduction. Every employee has an NI category which gives the amount payable as the website states.
In case you have met the conditions to qualify for statutory maternity pay, you will find this appearing on your pay stub as SMP. The limit for this payment to the qualifying person is a maximum of 39 weeks. Finding Statutory Paternity Pay (SPP) on your stub means that you are entitled to the payment for either one or two weeks in full.
When you come across YTD in your pay stub, you should take that to mean Year-to-Date. In some cases, it will be shown as YTD Earnings. This is a representation of your earnings calculated from the beginning of the year to the present time.
Federal tax or federal tax withheld will be indicated in your pay stub as FT/FTW. This deduction from your paycheck goes to the federal government. This amount can be changed by filling a new W-4 form.
You will normally find ST/STW acronym on your pay stub which stands for state tax or state tax withheld. The state where you are a resident is the beneficiary of this deduction. Depending on a particular state, there is no requirement to pay state income tax.
SS/SSWT appearing on your pay stub stands for Social Security or Social Security Tax Withheld. This money goes to the government and deposited in a social security fund. This money is accessible to people upon attaining a defined age.