Personal Finance

Understanding Your Paycheck

Taxes

If you know what taxes are you probably hate them and wish you didn't have to pay them. Taxes are compulsory charges imposed on citizens by your local state and federal governments. The Internal Revenue Service (IRS) collects federal taxes, issues regulations, and enforces tax laws written by Congress. Taxes can take a huge chunk of money out of your gross pay, sometimes equaling to hundreds or even thousands of dollars depending on how much money you make in a year.


Direct Deposit

If you want the most secure way to deposit your paycheck into your bank having a direct deposit is the best thing to do. A direct deposit is always done online and your money is instantly put into your bank account where you can access at your own expense. The employer is who is responsible for putting your paycheck into your account and if you want this service you will have to ask your employer if your work place has direct deposit. Your paycheck is not directly handled and you will know when your paycheck will be deposited.




Payroll Card

Payroll cards can replace a large amount of cash in your wallet and are much safer. Payroll card is a plastic card that is electronically loaded with a payment. There are multiple things you can do with a payroll card including making purchases or for ATM use. With payroll cards you are protected from fraudulent charges if your card is stolen. If it is stolen or lost you can always get a second card.

How to Read a Paycheck Stub

On your paycheck you will see a multitude of information and that can be confusing if you have never gotten a paycheck before. First you will see all of your personal information including your full name, address, and your social security number. Your gross pay will be on there as well and your gross pay is the money you made before the deductions. The amount of money subtracted from your gross pay is called deductions. There are two types of deductions, required and optional. After deductions gross pay is now called "Net Pay" and you get to keep all of the money involved with net pay.