It’s always necessary for an employee to review their paycheck. This is an ideal time of year to remind your employees, especially new hires, to review their first pay check of the school year for accuracy of the following information:
- Social Security Number
- Gross Pay
- Tax Withholding – Federal and state income tax should appear reasonable, compared to their tax bearings for the previous year. The higher the number of dependents claimed, the LESS income tax withheld. Employees are urged to consult with a professional tax consultant to ensure proper federal and state income tax withholding.
- STRS or PERS being deducted (if applicable). STRS participants should not have social security FICA being deducted from their paychecks.
- Any insurance or other voluntary/involuntary deductions.
- Summer Hold Back deductions, if participated; if not, checks will not be received in the summer months.
- All other deductions coming out of their paycheck, such as garnishments, etc., should be understood and agreed with.
If issues and errors can be caught early in the year, resolving them becomes quite easier.
TAXES THAT MAY APPEAR ON EMPLOYEES’ PAYCHECKS:
CASDIS-EE (California State Disability Insurance) – a mandatory employee tax.
CASIT (California State Income Tax) – This is a personal state income tax withholding based on how employees complete their DE 4. If they are over or under withhold during the year, they will get refunds or owe taxes when they prepare their 1040’s or 1040 EZ tax returns. It’s important to consult a tax preparer to ensure that they are withholding the proper amount.
CASUI-ER (California State Unemployment Insurance) – This is an employer paid tax not deducted from the employee’s paycheck. Tax rate varies from employer to employer and year to year based upon the number of former employees collecting unemployment benefits. This maxes out at $7000 in salary per year.
FHI-EE (Federal Health Insurance) – EE means Employee portion (Medicare tax) = 1.45 % of earnings (note: employer matches this tax as well, which shows up as FHIER)
FICA-EE (Federal Insurance Contribution Act) – EE means Employee portion (social security tax) 6.2 % of earnings (note employer matches and it shows up as FICAER). Those in STRS should not be paying this or school should not be paying on their behalf. FICA-ER is the Employer portion of this tax.
FIT (Federal Income Tax) – This is a personal federal income tax withheld, which incorporates the same description as CASIT above, except the driving form is the DE 4.