Skip to content
Tate HackertNovember 3, 20182 min read

Financial Wellness: Understand Your Paycheck Better

Your paycheck has a lot of information on it. Different numbers, taxes, and totals. But what does it all mean and what should you be paying attention to? We have all the answers you need.

 Most people have their paychecks deposited right into their bank account these days, but that doesn’t make it any less important to understand all those lines written on your paystub.

What do all these lines mean?

Generally, a standard paystub will list the following:

  • The “Gross Pay” amount, which is how much you have earned since your last paycheck. This is higher than your actual take home pay.
  • The “Taxable Earnings” amount, which is used to calculate the taxes that will be charged on your earnings.
  • The “Net Pay” amount, which is how much money you’ll actually get to put into your pocket (or bank account).

In addition to the above, your paystub may list things like “Withholdings” which is an amount your employer takes out for taxes at the state or federal level. You’re also going to see FICA deductions or individual line deductions for Social Security and Medicare.

If you have any additional benefits, they should also be listed on your paystub. Such benefits may include a deduction for your retirement contributions or any paid time off (PTO) that you have taken during the pay period.

Why Am I Subject to Tax Withholdings?

Every employee will notice that their employer is deducting state and federal taxes from their earnings. While your employer pays a portion of these taxes just for being your employer, you need to play the “employee portion” of annual income tax for the money you earn.

The amount that is withheld for income tax will depend on the amount you earn, your tax bracket, and some other aspects. Don’t worry, if your employer withholds too much money, you’ll get it back in the form of a tax refund at the end of the year.

However, if your employer does not withhold enough for your annual taxes, you will have to pay the difference owed out-of-pocket at the end of the year, so it’s important that you make sure your employer has accurate information.

You don’t want to overpay (because then you don’t have access to some of your earned income until next tax season rolls around), but you also don’t want to underpay. Either can put you in an undesirable financial situation.

Why are There So Many deductions?

If you are looking at your pay stub, you may begin to feel overwhelmed by a number of different deductions that show how much your employer is taking from your earned income.

These deductions may include medical, dental, and/or life insurance along with retirement contributions, flexible spending accounts or a health savings account. Some of these deductions may be optional if you would rather pocket more income, but you need to look at the long-term picture before you turn down any of them. Employee advances or On-demand pay services like ZayZoon may also show up as a deduction as well. Make sure to keep track of any optional deductions so you can ensure you’re on top of your finances.


To see more about how ZayZoon is trying to help, check out the blog at:



Tate Hackert

Tate is the brain behind ZayZoon, developing the idea of providing access to funds before payday, in 2013. He feels gratified knowing “we get to improve the financial health of people each and every day.” One of his favourite ZayZoon experiences involves a business trip to Selinsgrove, Pennsylvania where he helped film a Holiday Inn Express testimonial video. Wearing a ZayZoon shirt at the local Walmart, someone saw Tate and exclaimed, “Hey, ZayZoon! I use that!"