How do you understand paycheck tax deductions?

Answer by  Chaneygirl (1755)

Your employer is required to withhold 6.2% for Social Security and 1.45% for Medicare. This may be called FICA or OASDI on your check and maybe combined or separate. They are also required to withhold federal income tax and possibly state and local income tax. You may also have insurance, retirement, uniforms or other employee expenses.

Answer by  Att4372 (1704)

Gross pay is what you earn. Subtract FICA and income taxes. Subtract required dedections (union dues) and optional deductions (retirement plans, United Way contributions). Balance is net pay.

Answer by  Taxmatters (169)

Contact the payroll person at your firm. They can explain all of the tax and other deductions. If you have errors on your W-4, withholding statement, it can be changed at that time. Be specific on any deductions you don't understand.

Answer by  Cecilia (2828)

Start with your Gross Pay. The first deduction is usually for FICA (social security and medicare) then your State and Local taxes are withheld. Ask your HR person for details.