Receiving a pay stub is a regular occurrence for most employees throughout the country, showing all of the income received from the company. It will also show all of the deductions that your employer has made, including state and federal taxes, health care, and student repayments.
It is, therefore, essential that you check your pay stub each pay period to ensure that the correct amounts are showing. If you do not know what to look for, it can be difficult to discern if the pay stub you have received is correct. So, we have some common things to check for below.
Educate Yourself
If you have not previously worked in payroll, you may be unaware of exactly what should be included and shown on your pay stub. It can make it difficult to check stubs if you do not know what you should be checking for. Therefore, it is important that you learn what should be shown and how this is calculated to enable you to ensure each pay stub is accurate.
Accuracy of the information on your pay stub is important as the details from your pay stub will be used to file your annual taxes. It is easier to establish and correct mistakes when they happen instead of when you are filing your tax return.
You can ask your payroll department to explain your pay stub to you and advise what is included in each section and how it is calculated. This is a great way to get specific information relating to your employer rather than generalized information that is not relevant to you.
It can be helpful, though, to look online for information about how the calculations are completed for each deduction. It is important to research only the information relevant to your state, as state-mandated deductions can differ. Finding the information for this from a government source is the best way to ensure that the information you have found is accurate.
Review Your Pay Stub
Once you are confident you have all of the information you need to ensure that your pay stub is accurate, we recommend that you go through it line by line. This will ensure the most accurate check of all of the information on your pay stub. You can check the income amount based on your pay rate and the hours worked in the pay period.
Checking each deduction based on the income received will only be accurate if the payment information is correct to begin with. Each deduction will be based on your salary amount, so always check this first.
If you find any errors on your pay stub, you should speak to your payroll department immediately to check if the information is, in fact, incorrect. If the payroll department confirms an error, they should be able to provide you with a corrected and updated pay stub.
A further check of this pay stub should then be completed to ensure accuracy before you store this to complete your tax return.