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What are the deductions on a paycheck?

deductions on a paycheck

deductions on a paycheck

Look at my paycheck

There are 5 sections: earnings, taxes, pre-tax deductions, after-tax deductions, and benefits paid by the employer.

Earnings –

This section shows how much I earned. So you can see that I made $ 11,041.67 this pay period and the total number so far is $ 110,416.70.

Taxes -paycheck

You will see three items there: Federal Withholding, MED / EE, and OASDI / EE.

Fed retention is simple, you can read my full article here. What should you know before completing Form W-4? – One more dime

Fed MED / EE is the employee-paid portion of Medicare tax.

Fed OASDI / EE is the portion paid by the employees of the Social Security tax. This tax provides the funds to pay for social security benefits.

Please note: Fed MED / EE and OASDI / EE together are sometimes called FICA taxes.

Pre-tax deductions:

 You will see the following 4 items there: insurance, 401k, parking rebate, and HSA.

After-tax deductions: Long-term disability (most states have to force employees to take LTD) and 401k Thrift (after-tax 401k contributions).

Read here how 401k Thrift contributions helped me accumulate $ 100,000 in my Roth IRA in less than 4 years – My Roth IRA crosses $ 100,000 (2011 – 2015) – One More Dime

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