Lesson 3 of 5

Reading your pay stub without getting lost

Pay stubs vary by employer, but almost all of them break into the same four sections once you know what to look for. Earnings shows your gross pay for this period, plus year-to-date gross -- useful for checking you're being paid correctly and for tax planning. Taxes shows federal, state, and FICA withholding for this period and year-to-date. Deductions shows your elected benefits -- health insurance, retirement contributions, HSA/FSA -- also period and year-to-date. Net pay is what's left, and it should match what actually deposits into your account. The single most useful habit: check your net pay against your bank deposit every pay period, at least for the first few months at a new job or after any benefits change. They should match exactly. If they don't, that's a payroll error working against you, and those don't fix themselves -- they need to be reported. Year-to-date figures are also worth glancing at around tax time and whenever you're deciding whether to adjust your withholding or retirement contribution percentage.