Working World

You did it. You nailed the job interview. From now on, you’ll be making $20 an hour as an assistant to the head of marketing. With a cool $800 in your pocket each week, you should be able to buy that car, right? Not so fast. Some of your money is going elsewhere. Here’s how it breaks down.

Salary and wages: Employers list your hourly rate along with a calculation of the hours worked. Sick and vacation days are separate, along with reported tips and overtime. All these make up your gross earnings.

Payroll taxes: Quite a bit comes out in this category, including federal income tax based on your adjusted gross income or income after deductions. Remember the W-4 you filled out the first day? Medicare and Social Security, sometimes listed as FICA, are next, and they take 7.65 percent of your pay. Here in California, we also have state income tax and state disability tax.

Deductions: These can really add up. Are you responsible for part of your medical insurance? Do you make contributions to your savings account or retirement fund? What about United Way? All these show up in this section, also known as “adjustments.”

Current and Year to Date (YTD): Employers list all the particulars of this pay period and then provide a running total for the year. They might also include accumulated sick and vacation time.

Net pay: Finally, there will be your net pay, what you really put in your pocket. It’s a good practice to check each stub for the correct Social Security number and proper spelling of your name. Be sure your deductions and contributions are accurate and report any discrepancies ASAP.