When a student gets their first job, one thing they need to learn early on is how to read and understand their pay stub, according to the Kentucky Higher Education Assistance Authority (KHEAA).

“Getting your first pay check is really exciting because you can see your hard work paying off,” said Gov. Andy Beshear. “But it can also be confusing until you learn what all is on a pay stub. You can take the time now to learn what to expect and make sure you’re being paid everything you’re owed for the job you’ve done.”

Federal and state tax codes are complicated, so learning about the deductions you see on your pay stub is vital to managing your money and budgeting. When it comes to the federal income tax withheld from your pay, you should make sure the right amount is being taken out. When you file your taxes, you don’t want to discover that you owe a large amount because you didn’t have enough withheld throughout the year.

Each employer’s pay stub is different, but you will usually see these items:

  • Gross Pay: This is what you earned during that pay period before any taxes or benefits, such as insurance, were withheld.
  • Net Pay: This is your take-home pay after withholdings.
  • Federal Tax: This might be abbreviated as Fed Tax, FT or FWT. It shows how much was withheld from your paycheck in federal income taxes.
  • State Tax: This could be abbreviated as St Tax, STW or simply by the abbreviation of the state in which you reside.
  • Local Tax: Some cities or counties levy a local tax. Depending on where you live or work, you may not be subject to this tax and, therefore, won’t see anything withheld.
  • Social Security Tax: This tax might be abbreviated as FICA, SS, SSWT or OASDI. The federal government requires that 6.2 percent of your wages be withheld.
  • Medicare: This tax is typically abbreviated as MWT or Med. The federal government requires that 1.45 percent of your wages be withheld.
  • Year-to-date (for pay and deductions): The year-to-date fields show how much you have earned up to that point and what has been deducted for each tax or benefit.

KHEAA is the state agency that administers Kentucky’s student financial aid programs, including the Kentucky Educational Excellence Scholarship (KEES). Its sister agency, the Kentucky Higher Education Student Loan Corporation (KHESLC), offers low-cost Advantage Loans to help students and parents pay for college or refinance student loans. For more information about Advantage Loans, visit advantageeducationloan.com.

Many of KHEAA’s student aid programs are funded by Kentucky Lottery revenue.

For more information about Kentucky scholarships and grants, visit kheaa.com; write KHEAA, P.O. Box 798, Frankfort, KY 40602; or call 800-928-8926.

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