With the ease of direct deposit, many people never see—or review—an actual paycheck or pay stub. Pay stubs—the part of the paycheck that lists important information like withholdings, wages earned during the pay period and where your money is going—are important to understand. Here are some basic terms and elements to know.
How to read a paycheck or pay stub
Other common questions about paychecks:
If I’m self-employed, how does my paycheck differ?
If you are a freelancer or self-employed, it is up to you to set aside a percentage of each paycheck for deductions like taxes, insurance, etc. When you are a full-time employee, your employer automatically takes deductions out of your pay.
What is the difference between the two types of income tax?
Federal taxes are collected by the U.S. government while state income taxes are collected by individual state governments. Both have different rules on deductions and what income can be taxed.
Is a paycheck the same thing as a pay stub?
No. A pay stub (also called a pay slip or salary slip) is a receipt from your employer, but you are not able to deposit it into your bank account.
Up Next
More from Bank of America
Contact Us
We're here to help. Reach out by visiting our
Contact page or schedule an appointment today.
