What is a payroll check?
Being an employee these days we don’t care much about our payrolls, what we actually are paid, our gross income etc., as our salary will be directly deposited into bank accounts, thanks to electronic payments. But for every employee, it is very important to know what he is paid totally for his work and what are tax deductions.
This is exactly what payroll check means. it is a salary statement for all deductions included. Generally, every payroll check, be it any company will have a similar setup of columns. It is not so easy to understand for a common beginner.
How to Read It?
Here are some steps to clearly understand how to read your payroll check. At first, every payroll check will have the following basic details, Your Employee Number or ID, Your name, company name, the date on which payroll check is issued. etc.,
These are general information which will be known to many. After this, there will be a column called pay period which obviously is the time period for which you are being paid. It might be weekly, bi-weekly, monthly etc., For some, there will also be a column which states your nature of employment, be it regular or contract basis.
Next one can see the column gross pay. This is the total amount you earn for that particular time frame without any deductions. In short, it is your gross salary. Column adjacent to this column will be Net Income which is your take-home salary.
This is the amount you are being paid after tax deductions and other insurance type allowances. Don’t get confused between gross income and net income. Next is your deductions column which in detail show the difference between your gross pay and net pay.
There are different types of deductions like State Tax, Federal tax, Medicare, Security Tax etc., You must also understand the term here Withholding allowances which is to help cover your taxes. It states how much money your employer takes from your gross salary every month to cover up taxes.
State Tax is the tax levied by the State Governments to the employers for the welfare of the State. Not that every State has levied taxes. Social Security is the amount which an employee will receive after his retirement so that they can lead a peaceful life.
For this, every month some part of your salary will be deducted. Medicare is a kind of health insurance set up. It will help at the time of medical payments and billing. There will be other columns in your payroll check such disability taxes, Unemployment taxes etc.,
Disability taxes are the amount which will be deducted monthly and will be given at the time of an accident at the time of work or it gets disabled. Unemployment tax is nothing but the security amount which will be paid at the time of lay off or losing a job for no fault of your own.
Not that every payroll check will be the same. But mostly these are the columns you will observe in a general payroll check. Read the details correctly and know what kind of deductions your salary is undergoing by looking at your own payroll check. If there is any discrepancy contact your human resource department.
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