The Pay-Stub Audit

Your starting point

Calculate a fictional paycheck and distinguish employee deductions from employer contributions.

A paycheck begins with gross pay, then applies relevant deductions to determine net pay. Federal income tax withholding, Social Security tax, Medicare tax, and other deductions are separate categories. Knowing the label matters because different rules and purposes apply. A gross wage is not automatically the amount deposited into an account.

For ordinary covered employee wages in this exercise, the employee Social Security rate is 6.2% and the employee Medicare rate is 1.45%, as shown in current IRS guidance. Social Security has an annual wage base and additional Medicare rules can apply in other circumstances. This fictional payment is below relevant thresholds and contains no special exemptions or pretax adjustments.

Employers also have their own Social Security and Medicare obligations. Their matching contributions are not another deduction from the employee’s stated gross pay. The audit below supplies every deduction needed and excludes all others for the calculation. It is a practice record, not an estimate of a real student’s or family member’s paycheck.

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