There’s a reason it’s called “earning a living.” No matter how much you enjoy your job, that paycheck is a good incentive to keep working!

But before you do anything with your money, take a close look at the pay stub. You’ll notice that some money was subtracted from your total amount. Why? It’s because deductions were taken out of your check.

What Deductions?
Some of your earnings go to taxes. Every citizen of the United States who earns an income must pay taxes to the government.

Some deductions are required by the federal government. (These are the “Statutory” deductions noted on our sample.) Required deductions include:

• Federal Income Tax
• Federal Insurance Compensation Act (FICA) – It is the proper name of Social Security.

Depending on where you live, you may have some or all of these other deductions:

• State Income Tax
• City Taxes
• SDI – State Disability Insurance