Do you know when your next payday is? Most of us remember when we are set to receive our awaited direct deposit of wages, but when was the last time we looked at our paystubs to check the deductions from our paychecks? Reviewing your paystub periodically is a great way to keep a pulse check on your income, tax picture, retirement contributions, benefit costs and more! Below are items to look out for during this review.
- Payroll mistakes - Something that may not be recognized until later is a discrepancy between agreed-upon payroll terms and the data input into the payroll management system. For instance, you might have agreed to a certain number of PTO hours, but the system shows a different amount. Or, your gross pay might be lower than expected due to an error in the system. You will want to do a quick check that the gross pay amount and even PTO hours accrued are the same as you expected.
- Taxes - During employee onboarding you must have completed a W-4 form to designate your tax filing status and number of allowances. This is what determines the amount of taxes taken from your paycheck. If your filing status changes or there was a birth in the family adding to the number of allowances, you will want to contact your Human Resources department about updating your W-4. This is crucial because failing to update your W-4 could result in over or underpayment of taxes.
- Health plan deduction - Depending on your full-time status, you are likely entitled to health insurance benefits through your employer. Oftentimes, we choose a health plan and forget to reassess in the future if this is still our best plan option or if an alternative would be better financially due to a change in medical conditions or ability to meet deductible limits. Other health plan options your employer may offer through a payroll deduction are dental and vision insurance. These are typically inexpensive benefits you want to ensure you are taking advantage of.
- Retirement contributions - Another deduction from your pay is the amount you decided to allocate toward an employer-sponsored retirement plan. This is an important deduction as it directly impacts your future financial security. Something to consider is if you have received pay raises since you last adjusted your deduction amount you may want to increase this to keep up with retirement lifestyle goals.
- Life & disability insurance - Your employer may offer standard life and disability insurance coverage at no additional cost to you. If this is the case, they often provide employees the option to receive additional life and disability insurance coverage when you are willing to pay the difference through a deduction from your pay. This option is worth exploring before shopping the market for separate policies to meet your coverage needs.
These five points are the most common items, but they are certainly not all-inclusive. Every employer provides different options, which is why reviewing your paystub at least annually is beneficial. Your Financial Planner at Apella Wealth is also here to assist you in deciding what your best employee benefit options are for you and your family, so don’t hesitate to reach out!
Apella Capital, LLC (“Apella”), DBA Apella Wealth is an investment advisory firm registered with the Securities and Exchange Commission. The firm only transacts business in states where it is properly registered or excluded or exempt from registration requirements. Registration of an investment adviser does not imply any specific level of skill or training and does not constitute an endorsement of the firm by the Commission. Apella Wealth provides this communication as a matter of general information. Any data or statistics quoted are from sources believed to be reliable but cannot be guaranteed or warranted.
