How to read your paycheck


Rather you’re paid weekly, bi weekly, or semi monthly reading your paycheck can be a little intimidating. From gross to net pay, taxes being taken out, different allowances claimed,  and miscellaneous abbreviations that seem to make no sense! What does it all mean?? 🤷🏾‍♀️ We work hard for our money so today we will take a look at how to read your paycheck so you know exactly where your money is going.

*Ok, lets start from the beginning – Look at the top of your pay stub. You will find basic information at the top of your paycheck stub, such as the name and address of your employer and the date that the paycheck was issued. You may also find information about the company that processes payroll for your company.

  • You will likely find the check number at the top of your paycheck stub. This is useful for entering into your financial records to track income sources and amounts.
  • If something is wrong with your paycheck, it will likely be the fault of the payroll company. Check with human resources if you spot a problem.

*Gross and Net Pay – Find the area labeled “Gross Pay”. Gross pay is the total amount that you earned before any withholdings have been taken. The gross pay will usually be over a certain period of time, known as a pay period. 

  • Any taxes or other withholdings will not be reflected in your gross pay.
  • A pay period will vary in length, depending on your employer. These pay periods may commonly cover weekly, bi-weekly, or monthly periods. Other pay periods are possible, however, not as common.

Locate your “Net Pay”. Find the amount next to the area labelled net pay to learn how much of your earnings are yours to take home. An amount next to net pay has already had any withholdings or taxes removed from it.

  • Net Pay is the actual amount of your earnings that you will receive.

*Next let’s take a look at the deductions, which includes the taxes that are withheld. Look for “Federal Tax Amount”. This area will give you the total amount that the Federal Government has taken from your pay for taxes due. This amount will vary depending on how many exemptions you claimed when your filed your W-4 tax form.

  • You can change the amount of exemptions at any time by filling out a new W-4 form.
  • Ask your human resources contact to change your W-4 form or how best to make changes to it.
  • Exemptions can be made for yourself, others, or you can claim none.

Find the area labeled “State Tax”. The area marked state tax will usually be found very close to the item for federal tax. This listing for state tax will show your just how much of your earnings went to the state you live in.

  • State Tax will vary from state to state.
  • Not all states will collect an income tax.

Locate the item labeled “Social Security”. Social security is a federally mandated payment into the social security system. When you reach an age at which you might retire, you will be able to access the social security system funds, receiving a monthly payment from them.

  • Paying into social security will help finance your retirement.

Find the area listed as “Medicare”. Medicare is program that can help with medical payments and billing, once you are eligible for social security. Payment into Medicare is mandatory for both you and your employer.

*Lastly, let’s take a look at those miscellaneous abbreviations and what they mean.

  • YTD: Year-to-Date
  • FT or FWT: Federal Tax or Federal Tax Withheld
  • ST or SWT: State Tax or State Tax Withheld
  • SS or SSWT: Social Security or Social Security Tax Withheld
  • MWT or Med: Medicare Tax Withheld

Sharing is caring!