What Are These Deductions On My Paystub?

Q. I have some unfamiliar tax deductions on my paycheck. What could these be?

A. This is a very loaded question. Every company could create acronyms that are unique and describe the exact same tax item as another company, yet with a completely different code. There are however 4 standard tax deductions that will appear on the majority of pay stubs received in this country.

1. Federal – Could be called FIT, fed tax, f tax or Fed TX. This is often the first deduction that shows below the gross wages line. This is a calculation for withholding that is deposited on your behalf with the IRS by your employer towards your federal tax liability. The calculation comes from your Marital status and allowance value settings on the Federal Form W-4 that you gave your employer at some time in the past. The numbers on this document should be reviewed regularly and especially in case of a significant life event such as marriage, divorce, birth of a child, purchasing a house, etc.
2. FICA – This stands for Federal Insurance Contributions Act and now signifies Social Security withholding. This line could say Social Security, SS, FICA or OASDI and it may even be combined with the next item we discuss, Medicare. FICA is calculated as 6.2% of taxable wages.
3. Medicare – This is a deduction for Medicare insurance and is 1.45% of taxable wages for employees. It may be combined with FICA or it may be listed as Med or something similar.
4. State – If your state has an income tax, it will be listed as SIT, St TX, state or maybe even the name of your state.
5. Miscellaneous – Your company may have other miscellaneous deductions such as 401(k), Sec 125, union dues, charitable deductions or other state mandated deductions such as SDI. There is no way I can describe in this column what all the possible combinations are. Your payroll department should be able to describe them to you. Keep in mind they will not help you with tax advice, but they should be kind enough to give you some education on the items on your paystub.

If you feel that a tax on your check is not correct, you can use the free Paycheck Calculators found on many websites including, ADP Resource Center, SurePayroll, PaycheckCity.com and Payroll-Taxes.com. By entering your data as it is listed in your company’s payroll system, you can get a good idea what your check should look like and if you need to make any changes.

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