Understanding Your Pay Stub

Leslie from Gusto explains how to read a pay stub, highlighting the differences based on state and payroll provider. The video covers the main formula for calculating net pay, defines key terms like gross pay, pre-tax deductions, employee taxes, and post-tax deductions. It also discusses additional elements like reimbursements and employer contributions to insurance and taxes.

What factors can cause pay stubs to look different?

• The type of job you have

• The state you live in and the payroll provider

• The amount of taxes you pay

• The number of hours you work

What is the main formula used to calculate net pay on a pay stub?

• Net pay minus taxes

• Net pay plus bonuses

• Gross pay plus deductions

• Gross pay minus deductions

Which of the following is considered a pre-tax deduction?

• State income tax

• Health insurance

• Garnishments

• Local taxes

What are employee taxes typically composed of?

• Only federal income tax

• State disability and local taxes

• Both B and C

• Social Security and Medicare

What is an example of a post-tax deduction?

• 401k contributions

• Health insurance

• Federal income tax

• Garnishments

What might employers include on a pay stub as reimbursements?

• Holiday pay

• Expenses paid for business purposes

• Overtime pay

• Bonuses

Which taxes are considered employer-paid taxes?

• State income tax

• FICA and unemployment taxes

• Local taxes

• Federal income tax

What contributions might an employer make to an employee's pay stub?

• 401k and health insurance

• Bonuses

• Overtime pay

• Holiday pay