How to Read Your Pay Stub as a W2
You would not be alone in your confession by a long shot if you admitted that your eyes glaze over when you open your paystub until you get to the number that tells you how much money you get in your check.
Your net pay is the good part of going to work each day.
But there’s lots of important, and dare we say, useful information on a paystub. You can be well prepared for tax season when you consider what information is available on a paystub since it’s much like looking at your end-of-the-year W-2.
Let’s review what you’re likely to find on your paystub so that you can take a closer look and understand it all next time.
What Information Is Available on a Paystub?
There’s a variety of paystub information on the paystub about you, your employer, your current pay, and your pay for the year so far.
Typically, at the top of the paystub, there will be your name, address, part of your social security number, and an employee ID number if your company assigns them.
Next, you’re likely to see your employer’s information, including the company’s name, address, and employer identification number. This is the number used by the IRS to keep track of information from your employer.
Next, your paystub will show the pay period information. This is the date the pay period starts and ends. It should also show the date you get paid for that pay period.
You’ll see information about earnings that starts with the gross earnings for that pay period and the year-to-date gross earnings. Then the employer will list the deductions and taxes subtracted from the gross income.
Most paystubs show the deductions and taxes subtracted for that pay period, and the total year-to-date amounts are taken out for those categories.
Finally, the paystub will show the net pay for that pay period and the net pay so far this year. Remember, your net pay is the amount of pay you bring home after removing all deductions and taxes.
How Is the Paystub Like a W-2?
You might wonder, how is a W-2 the same as a paystub? They have many similarities but are not exactly the same. Paystubs and W-2 forms will both usually show year-to-date information.
Why is that like a W-2? You could look at your last paystub for the year, and it should have the same information in the year-to-date columns that you would see on your W-2. Both forms show cumulative pay and deductions as the year progresses.
How Is the Paystub Different From a W-2?
The paystub is different from the W-2 because it shows information specific to a pay period. While a W-2 is cumulative, the paystub offers the specifics for a set pay period.
Many paystubs also contain information that might not be included on a W-2, like sick days, vacation days, and hours worked in a pay period.
Paystub Vs. W-2
Understanding what information is available on a paystub can help you process your actual pay better. It can also help you for tax season by monitoring the information in the year-to-date columns of taxes and deductions.
If you’d like more information about creating a custom paystub for your company, start your research. Get started by formatting a custom paystub template to meet all your information needs.