Can't Wait For Your W-2? Calculate Wages With Your Pay Stub Today
By Davis Clarkson , August 26 2019
Do you live paycheck to paycheck? According to CareerBuilder, if you work in the United States, there is a 78% chance that you do live that way. Moreover, 82 million American employees have had some sort of payroll error during their career lifetime. That is more than half of the workers in the United States. Not knowing for sure if enough money will be in your bank account next week is already hard enough.
It does not need to be compounded by costly mistakes. That is why it is more important than ever to be able to calculate wages with your pay stub. But how are you supposed to understand all that gibberish? It looks like Greek! Or worse, the nightmare of all high school math problems come back to haunt you. Don't panic!
It may look like the Davinci's Code, but we can help you crack it and you won't even need your W-2. Read on to learn how to avoid paying for your employer's oversights.
Anatomy Of A Paystub
To first understand how to calculate wages using a paystub, you first must understand what is on the paystub.
Gross Income And Net Income
Gross income is what you make per hour before anything is taken out. Net income is what you actually get paid after taxes and other deductions.
Non-Taxable Wages And Other Deductions
Gifts, disability wages, alimony, and employer insurance are all examples of Non-Taxable wages. It is exactly what it sounds like, income that does not get taxed. Other types of deductions reduce the amounts of your taxable wages: life insurance, 401K accounts, health insurance, etc...
Yep. Uncle Sam is going to take his cut and more than likely, your state will too. The most common taxes employees pay are:
- Federal Taxes: This is the tax you pay to the Internal Revenue Service. The rate depends on several factors including your marital status, the number of dependents, pay frequency, and gross income. 2019 Tax tables are in Publication 15.
- Social Security and Medicare Rates: In 2019, 6.2% of your taxable wages go to Social Security and 1.45% goes to Medicare. Once you have paid Social Security taxes on $132,000 of taxable income, you are no longer required to pay Social Security for the rest of the year.
- State and Local Taxes: State taxes are purely dependent on your state and each one will have its own rate. Depending on your county, you may also be responsible for a separate local tax. If you are lucky enough to live in Alaska, Florida, Nevada, South Dakota, Texas, Washington or Wyoming, you won't have a state tax.
Calculate Wages With Your Pay Stub
Now that we have a better understanding of what makes up a pay stub, it's time to math it all out.
- Add together all your non-taxable income and deductions.
- Calculate your taxes and add them together. If you found Publication 15 a bit intimidating, you can use this tax calculator to help determine your federal tax rate.
- Subtract the totals from step one and two from your gross income. If there were no errors, then the amount will equal your net income.
That's okay. Taxes are complicated and we are here to help. Let's get you started and help you generate your pay stub today. It's quite simple and you'll be done in minutes!