Pay Stub- Guide For New U.S. Immigrant Workers
Pay Stub Introduction
Today we want to help new U.S. immigrants working in the United States to understand their pay stub.
Remember, K-1 Fiance Visa holder must apply for and obtain an Employment Authorization Document (EAD) before they start working in the U.S. For this purpose, see our K-1 Now that You are in the USA webpage for information on how to apply for and obtain you EAD.
On the other hand, IR-1 and CR-1 Spouse Visa holders have the authorization to work in the U.S. as soon as they enter the country and get their visa stamped by immigration. Moreover, the stamped spouse visa serves as a temporary green card for employment authorization until the actual green card arrives in the mail.
We hope that since you are reading this post that you have read our previous blog posts:
Moreover, you found the dream job, began working and got your first pay check.
Now that you have your first pay check, it came with a pay stub that you do not understand.
For this purpose, we provide this post to help you understand your pay stub.
Understanding your Pay Stub
For example, below is a typical pay stub that comes with your pay check. Even if you get direct deposit instead of a real paper check, your company gives you a pay stub. Deposit your paycheck in a bank account as soon as you can. However, if you have direct deposit with your company, your paycheck gets deposited in your account electronically. See our previous blog post on “Open a Bank Account in the United States“.
At the top of your pay stub, you find basic information such as:
- The name and address of your employer
- Your name and address
- Date the paycheck was issued
- Pay period. This is the date range that your previously worked in which you are now being paid.
- Your social security number. Accordingly, remember to get your social security card and number before you start working. See our previous blog post “Obtain your Social Security Card” for information on how to get your social security card and number. Also, click here to find a local social security office near you.
- State and Federal Status. This is your tax filing status. For example, it can be married, single, head or household. This information is from the Form W-4 that your employer most likely had you complete. This helps determine how much taxes that the company will take out of your pay for the government.
- Exemptions. This is how many exemptions that you will claim on your taxes. This includes you, your spouse and any other dependents. Also, you could claim “none”. For example, the more exemption, the less taxes are taken out. However, be careful as if you put too many exemptions, you may owe taxes at the end of the year.
Hours, Earnings and Gross Pay
Then next section down on your pay stub is your Hours, earnings and gross pay. This information specifically includes:
- How many hours you work during the pay period.
- Hourly rate in dollars per hour.
- Gross pay which is the amount of money that your earn over the pay period before any withholdings have been taken out.
The pay period depends on the company. Most companies in the United States pay bi-weekly or every two weeks. However, some pay weekly, but very few pay monthly.
The withholdings or deductions portion of your pay stub itemizes all the things that are deducted from your paycheck before your actual or net pay. For example, these deductions can include:
- Federal tax withheld. This is specifically the amount of money that the federal government takes from your pay for federal taxes due. This amount varies depending on your status (married or single) and how many exemptions that you claim. Remember from above, The exemptions are what you put down on your W-4. You can change your W-4 at any time. Just see your human resources person in your company to change your amount of exemptions by doing a new W-4.
- State tax withheld. This is specifically the amount of money that your specific state government takes from your pay for state taxes due. This amount also varies depending on your status (married or single) and how many exemptions that you claim. Remember from above, The exemptions are what you put down on your W-4. You can change your W-4 at any time. Just see your human resources person in your company to change your amount of exemptions by doing a new W-4.
- FICA or Social Security. It is a law that you must contribute to the social security system. You and your employer both contribute 6.2% of your income into social security. Then, when you reach an age at which you retire, you are able to get a monthly social security payment.
- Medicare. Medicare is the U.S, government’s program that helps the elderly and people of other needs with medical payments. It is also a law that you must contribute to Medicare. You and your employer both contribute 1.45% of your gross pay to Medicare. You can use Medicare once you are eligible for social security benefits.
- Health Insurance deductions. The amount is your share of the health insurance premium. The deduction is from your gross pay as your share in your health insurance premium. The company pays the premium to the insurance company.
- Retirement funds. If your company offers a retirement plan, they take deductions and apply them to your plan. Typically, you specify what percent of your gross pay that you want to go into your retirement plan each pay period. In fact, this is a great way to save money for retirement. Even better, some companies will match your percentage up t a certain amount and also put that into your account. Amazing, you just doubled your money.
- Other deductions can include any life insurance, long-term disability or other things that you have signed up through your company.
Net pay is the actual amount of your paycheck. It is the amount after withholdings have been taken from your gross pay. This is the actual payment that you receive.
Year To Date Column
Most pay stubs also provide a year to date column. This shows everything that we discussed above including income and deductions for the year to date instead of just this pay period.