Your paycheck comes every couple weeks and mostly you think about the money that’s coming in and where it needs to go. Do you ever stop to examine your check stub? It might seem like a lot of mumbo jumbo and confusing numbers. What does it all mean? In America today, 57% of Americans are struggling financially. Learning what everything on your check stub means is your first step to money management. It’s time to become familiar with exactly what is coming in on payday and you can find this on your check stub.

Gross vs. Net

One in three American teens does not understand the difference between gross pay and net pay. Teaching teenagers this difference as they start their first jobs will help them understand their paycheck. Gross pay is the amount of money you receive BEFORE all the deductions. If you think of your paycheck as a pie, it is the entire pie. Little slivers of that pie are given out in taxes, healthcare, 401K and more. The net amount of your paycheck is what you get after all those pieces of pie are taken out. The net amount is what is deposited into your bank account.

Where does your money go?

You might be wondering where all those pieces of your pie are going. Here are a few places your money goes before it hits your bank account:

  • Federal income tax: Depending on what your tax filing status is (married, single, divorced, etc) determines the amount of income tax that is deducted. Your employment had you fill out a W4 form when you started to determine this amount. Go to and the withholding calculator will help you decide if you should adjust your taxes.
  • Health Care: If insurance is offered with your employer, the cost for this will be deducted from each paycheck.
  • 401K: If you enrolled in a retirement program, a portion of your paycheck goes toward this so you will be able to live comfortably when you retire.
  • Social security: This withholding will be paid to you by the government upon retirement.
  • Medicare: This deduction pays for your health care insurance after you retire.

A summary of your check

On your paystub you will also see your PTO or paid time off which your employer might offer. This number grows with each paycheck depending how much your employer gives per hour you work. You will also see a summary of your deductions and taxes as well as a YTD (year to date) amount of all your deductions and income. This information is useful when planning out your monthly allowances and expenditures. Seeing your year to date income will help you plan for the future if you budget your finances wisely.

To help take the stress out of pay stubs for your employees, Check Stub Maker brings simplicity to this monthly task. Our easy calculator helps make your job easier. Check out our simple website for all your pay stub needs.