What are Pay Stub Deduction Codes
Employees have been having a hard time trying to figure out pay stubs but it is not only a challenge to them but employers who have to handle them too. Majority of both employers and employees are stick stuck trying to figure out what pay stub deduction coded are, their meaning and how they work. All the problems and hassles you are going through trying to figure out pay stub deduction codes can be easily cleared. This article will educate you on the different types of pay stub deduction codes and what they are used for.
Everyone understands the importance of paying taxes but to ensure you are actually paying, your employer deducts money directly from your pay stub which are usually listed by a series of codes indicated as deductions. All adults working in America have to pay taxes which some are optional, unfortunately, federal income tax is levied on all legal working adults in the country and you cannot choose not to pay it.
Another pay stub deduction code likely to appear on your pay stub is state income tax which is levied by almost all American states except seven which go about it in a different way. Federal Insurance Contribution Act or social security but will appear on your pay stub as FICA is another pay stub deduction code; this requires you to contribute six point two percent of your paycheck towards this system and so will your employer.
Besides the aforementioned pay stub deduction codes, you will see another designated as MED, FICA MED or FIM and is part of the social security the only difference is it doesn’t go into the pot because it is set aside for Medicare only. Another difference you will notice between Medicare pay stub deduction code and FICA is that it only takes about one point five percent of your income. At the bottom end of you pay stub you will see pay stub deduction codes for any benefits extended by your employer and you are a part of; deductions will be made monthly.
By now you understand that different employees offer different benefits which you can enlist for or choose the one you want knowing the contributions will be deducted from your paycheck monthly and will appear differently on your pay stub. You can continue reading and researching other articles and blogs about pay stubs to become an expert and learn what your pay stub should look like. Discussed above is what pay stub deduction codes and what they are used for.