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Understanding Payroll Deductions

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January 28, 2011


6 things you should know about your paycheck
Now that so many people receive their paychecks via direct deposit, most of us never even look at our paystubs to make sure we’re receiving the amount of money we’re due each pay period. What are you missing by not looking carefully over your paystub? Smita Patel and Carolyn Rogers-Payroll Managers with SCI Companies in Tampa and Atlanta, respectively-agree that you could be missing a lot. Often, says Patel, people are far too concerned with their net income to examine how much is taken out of a paycheck, and make sure the amount being withheld from their paycheck is appropriate and accurate. Here are six items that you might want to keep an eye on when calculating paycheck withholdings:
1. Federal Tax Payroll Deductions
Who doesn’t love a refund from the federal government, or at least a low tax bill? Paying attention to the number of exemptions on your W-4 is the key to ensuring that you’re pleasantly surprised each tax season. Regularly check the part of your paystub that delineates how much money is being withheld for federal taxes. Patel says, “If [you] go to IRS.gov and look at circular E, look up the frequency you get paid (weekly, biweekly, semimonthly and monthly) and how much, it will show you how much [in] federal taxes should come out of each payroll check.” If you discover that the wrong amount of federal taxes is being withheld, you can always fill out a new W-4 form and the correction should occur within one or two pay periods. Continue reading …
Article by Kim Ruehl and courtesy of PayScale.com where you can get accurate, real-time salary reports based on your job title, location, education, skills and experience.

Originally posted by Candice A

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