Why Do Employees Need to Carefully Read Their Pay Stubs?
Most employees tend to ignore reading their pay stubs. Many regard the information as irrelevant. But the information on the seemingly superfluous part of the paycheck can prove invaluable in detecting discrepancies.
An employee had sued FedEx since the pay stubs did not identify the start and end pay periods. This resulted in the company paying $8.25 million in penalties to the affected individuals. So, you should always watch the pay stubs carefully at each paycheck.
By reviewing your pay stub, you can make sure that you are given the right amount by the employer. You should make sure that the employer has properly calculated your salary.
1. Hours Spent
You should record hours worked and tally the number with that in the pay stub. Make sure that the employer has accurately listed the hours spent on tasks. The information should be reviewed every pay period to ensure that the hours worked by you during the period has been properly recorded and payment made accordingly.
Inaccurate information about hours worked can be a basis for legal charges against the employer. You should not ignore even small discrepancies regarding hours work as they can turn out to be a large amount.
You can also generate your own with a pay stub maker online. This will help you to ensure that the employer has calculated the salary accurately based on hours worked and work period as per fixed or variable work schedule.
2. Withholding Tax
You should also make sure that the employer has properly calculated the withholding tax amount. Make sure that the pay stub contains the correct Social Security number, paid time off, pay rates, and other tax-related information.
Reviewing the tax-related information on your pay stub is important. If the employer has entered the wrong Social Security number, the taxes paid to the IRS may be incorrect. It’s possible that someone else’s taxes may be applied to you.
In case of the excess tax amount, you will have to wait until the end of the tax period for a refund. So, you need to be proactive and promptly inform the employer in case you notice any discrepancy in the pay stub.
3. Employee Benefits
Employees should also inspect the employee benefits section of the pay stub. Make sure that the benefits such as health, 401k, and others have been properly calculated. Also, you should ensure that the coverage for spouse and other dependent has been noted in the document.
4. Holiday and Paid Time Off
Employees should also ensure that the holiday and paid time off information mentioned in the pay stub are accurate. You should make sure that the time off and holidays during the year matches with the pay stub.
Reviewing pay stubs is essential to ensure that you are paid correctly by the employer. It will prevent any surprises when you file taxes at the end of the year. Moreover, reviewing the piece of the paycheck will ensure that you are paid the accurate amount with all benefits properly calculated.