When you go through your paycheck, you will realize that it has information which contains the deductions and the amount that you made in a particular month. Sometimes it can be confusing to understand the language used in the pay stub because of the use of short forms and coded texts and the following are some of the details you should know about the deductions.
When you get your salary, you will be expected to pay for the Medicare program, and it will fall under the Federal Insurance Contributions Act. The FICA Med Tax is the abbreviations for the amount you pay for the Medicare program which takes care of citizens who are aged 65 years, and those who qualify for the Medicare facility.
The FICA SS Tax in your pay stub is meant for the Social Security tax that you pay, which is also instituted in the Federal Insurance Contribution Act. The social security deductions are meant to cater to those who are disabled and retirees, and you are qualified for the benefits when you are 67 years old.
If your state levies income tax, then your pay stubs will have a detailed section which dictates the amount you are required to pay for the state tax. Certain states such as Nevada, Alaska, Texas, Washington, and Florida do not require citizens to pay for the state taxes, and it will contain a blank space in the state tax column.
You will also be required to pay federal tax which does not entail Medicare or Social Security and the amount vary significantly for every citizen depending on the number of their allowances and tax rate. Before you get a federal tax, some calculations will be done on your pre-tax expenses, retirement contributions, health insurance payments, and employee benefits to arrive at an accurate figure.
All California residents who are employed are required to pay for the State Disability Insurance, commonly known as SDI. When you apply for a family leaves or disability leave days, you will be required to get a portion of your salary to cater for the leave.
The miscellaneous deductions break down other significant payments you are making, such as your health insurance, cafeteria plan, or other retirement plans. Signing for most of these plans can ensure that you reduce the amount that you will be taxed. The pay stub will vary from one state to the other, but having this necessary information will ensure that you are prepared for the deductions.