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Paycheck Stubs

Paycheck Stubs

October 24, 2017
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Last week’s post I talked about the poor state of financial literacy in this country. This week’s post will cover one of the most basics parts of finance, your paycheck stub.

There is a difference between your wage x hours worked (gross pay), and what you are actually paid (net pay). If you are paid $10/hour and work 40 hours/week, your gross pay is $400/week. From there comes deductions and contributions.

Deductions may include federal, state and local taxes. In addition to these, you also have Social Security and Medicare tax, which are 6.2% and 1.45%, respectively.

Contributions are next. A contribution is a benefit your employer provides but you pay for.  This includes insurance premiums, like health, dental or vision, and a retirement plan, like a 401(k).

After all of your deductions and contributions are taken out, you are left with your net pay. This amount matches what is on your pay check. This is what you take home.

Above is a sample of what a pay stub should look like.

Now that you know what is on the pay stub, you need to know what to do with it. Your pay stub usually comes attached to your paycheck. Once you deposit your check, you will have to put your pay stub somewhere. Place it somewhere safe, like a file cabinet or a lock box. Some pay stubs will have sensitive information on them, like your social security number or your address.


The pay stub is a great place to start on this journey to educate people to become more financially literate. It briefly goes into wages, taxes, insurance, and retirement plans. Please email me at if you have any questions about this topic.