Tuesday, November 22, 2018
Well it’s that time again folks. You did your 8 to 5 for two weeks and clocked in and clocked out and now you’re ready to reap the rewards of your hard work right? Well sorta. Stop, look and listen. There are a few things to do each pay period. Whether you get paid weekly, biweekly, semi-monthly or monthly you need to do a few things so you don’t have problems later.
- Review your Direct Deposit is correct. Usually when you start a company job this is one of the first things you do. After all, long gone are the days where you would spend a Friday afternoon trip to the bank to make a deposit. After all, time is money so why drive and then spend another 5 minutes waiting for your money when it can just all be done virtually instantaneous electronically? Not only is it safer because who wants to walk into a bank any more and navigate traffic? Make sure the correct amount is in there. Usually this is like clockwork unless there is a holiday or some company glitch, shutdown, furlough, etc. If there is a furlough or shutdown this is especially important.
- Verify Earnings and Leave. If there is one thing to say and say a thousand times it’s that mistakes happen and people are imperfect. Make sure to look through and skim through each line on your pay stub or as some places call it, your earnings and leave statements. There may be some mistake there and some pay stubs also have a little alert or message in some cases about noteworthy issues. In a few jobs over the years that we’ve worked in our lives we’ve encountered pay that wasn’t credited correctly or possibly payroll deductions that didn’t go through correctly.
- Verify W4. It is important to make sure you withholding statement is correct. In many cases again when you first start a job this is the first and only time you see this form. But it is critical to ensure you don’t owe a huge tax bill at the end of the year. We will assume in this article that you’re a wage-earner and not self-employed and so you have an employer, manager, or boss who does all this for you. If not then of course you need to address your tax situation and in that case you may need to send in tax payments yourself. But for most people the W-4 lets you specify how many people you would claim and what your withholding allowance will be for tax purposes. The higher the number which usually corresponds to more people on the tax return means you will take care of more people and fewer taxes taken out. And with a lower number like the number “one” or “zero” means that no allowances are needed and that you want them to take out the max for taxes. Now this may have changed in 2019 due to new tax rules from the Tax Cut and Jobs Act so check with your local tax advisor. Another note: most people should not mark “exempt” from tax because they are usually earning too much.
- Verify Health Insurance. You want to make sure you are still having the right health insurance and that they are properly deducting for your medical. If some life event happens such as birth, marriage, adoption, divorce, or death, then if you are enrolled in certain health care plans such as those part of the Affordable Care Act then you might have to notify your insurance of the changes which also may affect premiums.
- Verify Life Insurance. If you have life insurance, it’s a good idea to note that all is good with your deductions.
- Verify Leave info. This is a smart idea to look at to make sure your vacation hours or days allotted are still correct, and that your sick time is correct. As we’ve said, mistakes can happen.
- Verify 401k info. Whoever is your employer usually has some pension or 401k or retirement or similar type plan. You normally will make voluntary contributions. Obviously make sure that’s correct but more importantly, GET WHAT IS YOURS! If you’re entitled to a matching, then make sure you get 100% of your matching that you’re eligible for. If that means you have to be vested for a number of years get started. If that means that you have to contribute so much of your income to get the full matching, find a way to do so. Be as consistent as possible. Usually it’s a nominal or small amount compared to the size of your paycheck, but even then if you are allowed let’s say a matching that equals $100 every pay period, then make sure you’re getting that. That will add up over the years. $100 at 12 times a year is $1200 and at 20 years is $24,000. Not exactly peanuts. And think about it, over time it’s accumulating or growing over time if invested in a good fund. If there is a banking or company error then let someone know. Call someone, pick up the phone or put in a office support ticket or call payroll, but make sure to ask and get the money.
Do you have any payroll and pay day tips? What do you do to survive the workweek blues between each pay period?