Reading a Pay Stub Flashcards

Pay Stub Terminology

• Pay Period: Refers to the specific timeframe for which you are compensated, encompassing the days worked during that duration.

• Hours: Indicates the total number of hours worked within the pay period, essential for calculating earnings.

• Rate: The hourly wage or salary amount earned, fundamental in determining total pay before deductions.

• Gross Pay: Represents the total earnings calculated before any deductions are applied, reflecting the cumulative compensation for the pay period.

• Wage Deductions: The total sum of money deducted from each paycheck, which includes taxes and other withholdings.

Tax and Benefit Deductions

• Federal Income Tax: The portion of pay withheld to fulfill federal taxation obligations, based on income levels and tax brackets.

• FICA: Refers to deductions that fund Social Security benefits, ensuring financial support upon retirement.

• Individual State Income Tax: State-level taxes taken from earnings, varying by state regulations and individual income.

• Disability: A specific deduction aimed at funding disability benefits, providing assistance in case of long-term injury or illness.

• Other Deductions: May include contributions to savings accounts, charitable donations, or other financial commitments.

Final Earnings

• Net Pay: Also known as "take-home pay," this amount remains after all deductions have been subtracted from gross pay, representing the actual income available for expenditure.

• Direct Deposit: A convenient method where employers transfer net pay directly into the employee's bank account, streamlining the payment process.

• Year-to-Date (YTD): Indicates the total earnings accumulated from the beginning of the calendar year up to the current pay period, useful for tracking overall income.