Do You Toss Your Pay Stub Every Week? Maybe It’s Time to Take a Closer Look

What you do with your pay stub often depends on how you get paid. If you have direct deposit, there’s a good chance that you don’t even look at your pay stub if you don’t receive paperwork from your employer. Or you receive a pay stub and shred it without a glance, confident that the money is in your bank account, and all is good in your world. But the fact that you’ve been paid doesn’t mean that the information on your pay stub isn’t important. It’s a good idea to take a closer look at the information that’s provided, and make sure you understand what it all means.

The most important reason to double-check your pay stub is to ensure that you’re being paid correctly and that the right amount of money is being withheld on your behalf by your employer. You know better than anybody what your income is supposed to be, and mistakes do happen, but you won’t know if you don’t check.

An issue that we see quite often is insufficient withholding taxes being taken out of your pay. This creates an unwelcome surprise at tax time, a matter that can be rectified sooner if you take action right away.

How do you know if your withholding is correct?

We’ve all seen how complicated federal taxes have become – with different levels of deductions, changing tax brackets, tax credit advances, and seemingly constant law changes. While the IRS recommends that you use calculators to estimate your taxes, we sometimes see errors with this methodology. Unfortunately, the best way to determine your tax burden is to prepare a mock return – taking into account all sources of income, expected deductions, and anticipated credits. Then compare that to your expected withholding.

If there is a shortfall, reach out to your Human Resources department and discuss changing your Form W4 to request more federal tax withholding. If it looks like you may receive a big refund, first, double-check your work. Then, perhaps adjust your withholding to have fewer taxes taken out to receive more take-home pay now.


Here in Illinois, we have a flat tax, so it is less likely errors will occur. However, you need to keep in mind other sources of income that may not have tax withholding (such as investment income).

What other information on a pay stub is helpful?

Beyond what you are paid, and the taxes withheld, have you reviewed your other deductions and benefits? Unfortunately, there is no one set format for pay stubs. In fact, some states don’t even require employers to provide their employees with the specifics of where their money is going each pay period. For those who do receive paper records of their withholding amounts and more, here’s what you’re likely to find, and what it means.


Your payroll records have a wealth of information about your pay, taxes, and benefits that have implications come tax time. If you’d like us to perform an interim review of your tax situation, please contact Cray Kaiser today.

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