Fine Print: Pay Stub

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What is a pay stub?

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A pay stub is a document provided by an employer that outlines an employee's earnings and deductions for a specific pay period.

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What are gross wages?

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Gross wages are the total earnings of an employee before any deductions are made, calculated by multiplying the hourly rate by the number of hours worked.

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What is net pay?

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Net pay is the amount an employee takes home after all deductions, such as taxes and benefits, have been subtracted from gross wages.

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What is a deduction?

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A deduction is an amount that is subtracted from an employee's gross pay, which can include taxes, health insurance, retirement contributions, and other benefits.

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How does working more hours affect federal tax deductions?

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Working more hours typically increases gross wages, which can lead to a higher federal tax deduction due to a higher income tax bracket.

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What is the purpose of a pay stub?

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The purpose of a pay stub is to provide employees with a detailed breakdown of their earnings, deductions, and net pay for each pay period.

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What is the difference between fixed salary and hourly wage?

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A fixed salary is a set amount paid to an employee regardless of hours worked, while an hourly wage is paid based on the number of hours worked.

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What does 'take home pay' mean?

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Take home pay refers to the amount of money an employee receives after all deductions have been made from their gross wages.

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How often do employees typically receive paychecks?

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Employees typically receive paychecks on a regular schedule, such as weekly, bi-weekly (every two weeks), or monthly.

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What is the significance of understanding deductions on a pay stub?

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Understanding deductions is important for employees to know how much of their earnings are being withheld for taxes, benefits, and other contributions.