Federal and state taxes, Social Security and Medicare are common withholding categories found on payroll checks, notes ClearPoint Credit Counseling Solutions. Gross pay and net pay also appear on payroll checks, as do year-to-date amounts for each withholding and pay category. In jurisdictions that have a local tax, that deduction also appears on payroll checks.Continue Reading
People fill out W-4 forms prior to employment that designate the number of exemptions that they are taking for federal tax purposes, which, in turn, determines the amount of federal withholding each pay period, states ClearPoint Credit Counseling Solutions. Most states tax employee wages, and the amount deducted from each pay period is intended to cover taxes owed to the state for that tax year. Employers deduct a percentage of pay for Social Security from each employee's check, which then entitles the worker to receive benefits after retirement. Medicare deductions appear on payroll checks, with that money designated to supporting medical coverage once an employee is eligible for Social Security.
Gross pay is the total amount earned during a pay period prior to withholding, according to ClearPoint Credit Counseling Solutions. Net pay also appears on payroll checks as gross pay minus withholding. People may also see voluntary deductions on their payroll checks, such as contributions to insurance and retirement plans.Learn more about Income Tax