Where Did My Money Go?

When I started my first job, I was told my annual salary. Because I knew I got paid every other week, I divided my annual salary by 26. Then set up a basic budget. Now that sounded very simple to follow and easy to do.

BUT – and there is always a but – when I received my first check, I was actually shocked. The amount of money I had in my budget did not match the amount of money in my paycheck. I did know that income tax would be taken out and had allotted a percentage for that, but I had not allotted for enough or for other deductions. So I went investigating. After all, somebody was taking my money and I needed to find out where my money went.

The state in which I was working took out SIT – State Income Tax (also called withholding tax) and SDI (State Disability Insurance). Of course, the federal deductions included FIT – Federal Income Tax, as well as FICA (Federal Insurance Contributions Act). FICA is the combination of Medicare and Social Security. Medicare deductions are 2.9% and Social Security deductions are 12.4%. And then there were a few other deductions, depending on the department, job description, and location. In my case I had to pay a portion of health insurance. The company also offered a retirement program. I paid up to 6% of my salary into it and the company matched up to 3%.

The company paid taxes for having me as an employee. I paid half the FICA and the company paid the other half – Medicare at 1.45% and Social Security at 6.2% each. They also paid state (SUTA-State Unemployment Tax Act or SUI-State Unemployment Insurance) and federal unemployment (FUTA-Federal Unemployment Tax Act). Those funds were used to help pay me when I was unemployed. A portion of those funds were used for retraining. When I became employed again, my new employer paid those taxes.

When I finally figured out the real percent of deductions, the only way I could change my amount was to revamp my withholding withdrawals (exemptions). Exemptions range for 0 (the most amount of tax withheld) and 9 (the least amount).

So take a good look at your pay stub and review your deductions.


Brenda Gayle Bryant is the owner of the gayle group, is certified in QuickBooks and Microsoft Office, and is a past board member of both the National Speakers Association and American Society for Training and Development. Although she has been a corporate consultant for many years, her passion is teaching people sound financial techniques. Let’s get the scary out of finance.Contact her at brenda@thegaylegroup.com for a free financial analysis.


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