Accounting and Finance Foundations

Unit 8

Accounting and Finance Foundations Unit 8: Payroll 662

Payroll

Chapter 19

Lesson 19.4

Student Guide

Analyzing a Paycheck Stub (cont’d)

Your paystub should indicate, at the very least, your gross pay, your deductions, and your net pay. While

the set-up and organization of a paycheck stub can vary greatly from company to company, most paystubs

include the following:

A. Employer information, including the company name and address

B. The pay-period beginning and ending dates, the check-issue date, and the check number

C. The employee’s name and mailing address. The name appearing on the paystub must match the

name shown on the employee’s Social Security card. Also, the mailing address must be the same

address used for the employee’s W-2 forms.

D. The employee’s department, job title, hourly wage or salary, employee number and/or Social

Security number

E. Tax information, including exemptions elected on the W-4

F. Hours worked, applicable overtime, holiday pay, and other payroll information that would affect

gross pay

G. After-tax deductions, such as union dues, parking deductions, and charitable contributions

H. Before-tax deductions, such as contributions to some retirement plans, health savings accounts,

and other savings options

I. Taxes, including Social Security, Medicare, federal, state, local, and/or school-district tax

withholdings

J. Employer-paid taxes and benefits, including Social Security, Medicare, dental insurance, medical

insurance, and/or other fringe benefits that the employer pays for

K. Totals, which summarizes gross pay, taxes and other deductions. These totals are used to

determine total net pay.

L. Leave accruals indicating the number of vacation hours, sick hours, holiday hours, etc. that the

employee accrued during the pay period. Many companies also include the total leave accruals that

the employee has accumulated and/or used year-to-date.

M. Net pay, which should match the total electronic deposit and/or check for the employee

In addition to all of this information, some paystubs also include messages for employees, commission

calculations, other employee costs, etc. It’s really up to the business’s owner(s) and accountant(s) to de-

cide what information should be included on a paycheck stub; however, sections A through M listed above

are the most common, regardless of whether the paycheck is processed electronically or manually.