Demystifying your paycheque

Whether you’re a barista in a café or working for a longstanding family business, there’s no day like payday. But with 24 per cent of employees stating that they would look for a new job after just one mistake on their paycheque, it’s important that your employer makes your pay stub accurate and easy to understand.

If you still receive a paper paycheque, you’re in the minority: only 4 per cent of workers in Canada still get a physical cheque. A pay stub; however, provides the same information while giving you a lot more information about how your paycheck is broken down.

While net pay is the most important number — the actual amount that gets deposited into your bank account — here’s what else you need to understand about your pay stub:

A pay stub summarizes:

  • Your pay rate: This is the wage (hourly) or salary (annually) that you earn.
  • The pay period: The dates for which you’re being paid.
  • Deductions and contributions: These are important to pay attention to. They are the amounts added or withheld from for things, such as income tax, Employment Insurance, and Canada Pension Plan.
  • Other income and paid time off: Think vacation and sick time; it’s really important that your employer gets these right.

Last but not least, pay stubs outline the gross pay (before deductions and contributions), the net pay (what you’re taking home) and the year-to-date pay (the cumulative amount that you’ve earned since the beginning of the year). And remember that your annual T4 slip is a summary of all of your pay stubs, affecting the amount of taxes you pay and the level of benefits you qualify for and receive.

Nowadays, 82 per cent of workers access their pay stubs through an online portal, which is a feature of Wagepoint, a popular payroll software among many small businesses. Learn more about online payroll at wagepoint.com

Source – www.newscanada.com

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