Every other week you watch funds come into you account... It's payday, hooray! So, when was the last time you took a few minutes to check out the summary of information on your paycheck? Do you know what all of those letters mean? Once you know what all the abbreviations stand for, you can make sure your various elections are correct. Check it out:
Gross Pay -- The amount of money you've earned during a given pay period before deductions and taxes.
Net Pay -- Your total income after deductions and taxes are taken into account.
Year to date (YTD) -- The amount of money you've earned since the first day of the calendar year. You may notice year-to-date information in both the deductions section and the pay section.
Federal Income Tax (FIT, FT, FWT) -- Remember the W-4 form you had to fill out when you were hired by your employer? The information you provided on the W-4 is used to determine the amount that will be withheld from your paycheck for taxes. The more allowances you claim, the less money will be withheld.
State Income Tax (ST, SWT) -- The amount of state income tax withheld from your paycheck, which will vary depending on where you live.
Social Security Tax (SS, SSWT) -- Employers are required to withhold Social Security taxes from employees' paychecks.
Medicare Tax (MWT, Med) -- The federal government requires your employer to withhold a certain amount of your paycheck to fund Medicare. Social Security and Medicare taxes are also known as Federal Insurance Contribution Act (FICA) taxes or payroll taxes. Your employer is required to withhold 6.2% of your gross income for Social Security taxes (up to a certain annual limit) and 1.45% for Medicare
Depending on the company and your employment status, you might notice some additional deductions appearing on your pay stub or statement. This may include pretax and after-tax deductions. Pretax deductions (such as for medical insurance and 401(k) or 403(b) retirement plan contributions) are taken out before taxes and reduce your taxable income. After-tax deductions (such as for Roth 401(k) contributions) don't affect your taxable income. If there's something listed on your paystub, contact your Human resources department.