Paycheck Statement: 5 Big Reasons You Should Be Reading Your Pay Stubs
Posted by: electime 17th March 2020
What do you do for a living? Maybe you work in a factory as a laborer or maybe you’re the CFO of a major corporation. But whatever you do, a paycheck statement is a fact of life and something all workers get at the end of every pay period.
But do you pay attention to your pay stubs or do you just throw them in the trash can with all the other garbage, not bothering to read them? This can have detrimental consequences. There are lots of reasons why you should read your pay stubs every month.
Here’s everything you need to know.
1. Know How Much You’ve Earned: Budgeting
You need to know how much you’ve earned to set your budget. Sure, there are now budgeting apps and tools built into neo-banks like Revolut, but nothing beats budgeting on cold-hard paper.
You might have an idea of how much you’re going to earn, but you won’t know for sure until that paycheck is in your account and is verified by your bank. The paycheck might also remind you of extra hours you’ve worked and you might have some extra money to play with.
2. In Case You’ve Been Overpaying on Taxes
There’s nothing worse than finding out you’ve got less than you thought because the IRS has taken their chunk. We all grumble about how much we pay in taxes, but sometimes, they actually do take much.
You must check your paystubs every month to ensure that you have not been overcharged. If you believe there is a case for a rebate, then first talk to your employer and see what they have to say.
It might be that you have worked more hours than you’ve thought or there is a reason for the higher tax bracket. A manager or someone from accounts will be able to help you understand your statement.
In the next instance, it’s also worth ringing or emailing the IRS to find out what they can do in regard to your overpayment or what their explanation is for it. If you’ve overpaid on taxes, they can advise you on how to get a refund.
3. In Case You’ve Been Underpaid
How many hours did you work last month? Many people can’t remember as each day turns into another, but it’s important you keep track of how many hours you are supposed to work and any overtime you’ve done so you can check this against your paystubs.
This simple act of reading a paystub can save you a lot of money. If you think you haven’t been paid enough and your true working hours are not reflected on your paystubs, then be sure to chase a manager or someone from accounts and ask them to explain it.
If they agree with you that you haven’t been paid enough, they should give you a timeframe for when to expect that pay in your account. They might suggest that you are paid for the mistake at the next payroll.
It’s up to you if you accept this, but this might mess up your budgeting for that week. Be persistent that you are paid sooner if you know the lack of income from that one week will affect you financially.
4. Because You Have a Second Job
In the age of the so-called gig economy and challenging times for working-class people formerly employed in manufacturing, some people work two jobs either to make ends meet or to provide a higher standard of living for their children.
For some people, this is two part-time jobs; for others, this is a remote role that they can fit in and around their primary job. Either way, keeping paystubs is important for people who work two jobs, as they need to ensure they are paying the correct amount of tax based on their income across both jobs.
They might also need to register themselves as self-employed for tax purposes with the IRS.
5. For Your Records
Finally, keeping great paycheck statement records is important in case the IRS does come calling. If you are investigated in years to come, then you will want to avoid any worry or embarrassment by proving what your income and tax situation was at the time in question.
With many paystub systems based in the cloud, you don’t have to keep extensive paper records at home. You can use a pay stub generator to print PDF paystubs that you can access at any time, from any device.
Checking Your Paycheck Statement Is Important
Checking your paycheck statement at the end of every pay period is one of the most important parts of your working life.
You need to ensure that you haven’t been underpaid by your employers so you can claim what is rightfully yours, and this includes any overtime you have carried out. You also need to make sure that you have been placed in the right tax bracket in case the IRS comes calling one day.
Many people in the 2020s have a second job or a remote job to pay the bills and it’s important that you follow all the rules for taxes, which includes checking your paycheck statement regularly.
Finally, checking your paycheck statement is important for budgeting. You need to make sure that the amount you allocate for groceries and everyday spending fits in with the amount that is in your paycheck.
If you are interested in reading more about your paycheck statement or reading a paystub, be sure to check out the rest of our site.
