What are Pay Stub Deduction Codes
It is not just employees who are being baffled by pay stubs but employers too and the reason for this is they 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. Here is a simple guide to understanding the different types of pay stub deduction codes.
The series of codes in a column designated as deductions on your pay stub highlights what your employer is directly deducting from you; there is no foul play involved, this is done to ensure you are doing your duty of paying taxes and contributing to various systems and this is what pay stub deduction codes are. One of the most common pay stub deduction code you will often see on your pay stub is federal income tax which is a tax levied on all working adults working in the country; you have no say about this.
The different states in American are levying state income tax on top of the federal income tax; this pay stub deduction code may appear on your pay stub in initials or clearly including all the details. Social security as it is commonly known but will appear on your pay stub as deduction called FICA is another deduction code; this is paid by both employees and employers, commanding up to six point two percent of what you earn monthly.
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. Medicare is a one point five percent deduction of your pay that is meant for only Medicare and nothing else. Life insurance, health insurance and dental cover are some of the benefits often offered by most employers to their workers which they have to contribute to monthly, if you are a beneficiary of such, you will see pay stub deduction codes on your pay stub.
The benefits you are extended by your employer will appear differently on your pay stub depending on what you have enlisted for. You can become a pay stub by reading blogs and posts on pay stubs to have an idea of what it should look like; the things it should entail and the deductions codes you should expect to see monthly. After reading this article you now know what pay stubs are and what they are used for.
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