Understanding the Payslip: How to Read It

A payslip is a document received by an employee to tell them that a certain amount of money has either been electronically transferred to the employee’s bank account, or that a check is attached.

How to Read Your Payslip

Different cities, counties, and states make different exemptions and deductions, and these details will be recorded on your payslip. Included will be:

Name of employer

Your payslip will record the name of your employer, as well as address and company number.

Payslip information

This includes information about you, such as your name and employee ID number. It will also record the period of payment, check date and number (if applicable), or details about a bank deposit.

Current and year-to-date (YTD) totals

This part displays your Gross Pay for the pay period, the total amount of deductions made, and your Net Pay for the period. This section might also include details of how much you have been paid for the current financial year so far.

Earnings

The section that deals with earnings show all types of earnings you have received during the pay period, and sometimes your YTD totals. It will also show the dates of these different types of payment for the pay period, as well as any retroactive payment calculations.

This section will also show how many hours you worked on which dates for each specific earning code. It will also show the rate of pay for the different earning types, for example, overtime. It will show the total amount earned for each earning code during the specified dates.

Employee taxes

This part of the payslip shows how much money has been withheld from your check for employment taxes. Depending on where you live and work, these could include Federal Withholding, Social Security (OASDI), Medicare, State Taxes and local taxes.

Pre-tax deductions

This part shows your pre-tax deductions, including both voluntary and involuntary deductions. Voluntary deductions are those to which you have agreed, and might include things like parking, retirement plans, etc. Involuntary deductions are those that are mandated by State or Federal government, or by the courts for deduction from your paycheck.

Post-tax deductions

This section of the payslip tells you about any post-tax deductions that have been made from your payslip. These could include union dues, insurance, overpayment repayments, and others.

Taxable wages

This part shows how much of your wages were taxable for OASDI, Medicare and Federal Tax Withholding. Note that every tax has different qualifications or limits that determine whether or not wages are taxable.

Withholding

This section of the slip shows your Federal Tax Withholding at the time that the payroll was processed.

Paid time balance

This part displays the amount of time off you have at the time the payroll was processed, as well as accrued time off and time off that has been used during the period of the payslip. Time off balances will include compensatory, holiday, personal, sick and vacation time off.