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Is Your Paycheck Smaller Than It Should Be?

paycheck5 Money Mistakes That Could Affect Your Paycheck

Of course most companies don’t willingly deceive their employees, but mistakes do happen from time to time. After all, we are only human.

  • Exempt vs. Non-Exempt

An exempt employee is paid a salary, which is a fixed rate each pay period. If you work 50 hours in one week even though you are on a salary, those extra 10 hours you worked will not matter. You receive the same pay as if you only worked the 40 hours. Conversely, if you work only 35 hours in one week, you will still get paid as if you worked 40 hours.

A non-exempt employee is eligible for overtime for any of the time they worked over the normal 40 hours in a week. Overtime is paid at time and a half. So, basically if you normally earn $10/hour, you would earn $15 each hour worked over the normal 40 hours in a week. Conversely, if you only work 35 hours in a week, you will only be paid for those 35 hours you actually worked, unless you used vacation time or sick time.

  1. Overtime Pay

Many companies out there have automated systems to track time. Employees believe their pay is being calculated correctly. For the most part, timekeeping is most likely correct, but not always. Whether you are using a timecard system, computer system or just manually writing down your time, be sure to keep up with your hours. If your numbers don’t seem to add up, you may always stop by your HR or payroll department. They should be more than willing to walk you through the calculation that is used.

  1. Benefit Changes

Once a year, companies have open enrollment for benefits. Most companies change certain aspects of their benefit plans. Be sure to check your first pay stub after open enrollment to see what changes have been made. If you feel the deductions are incorrect, be sure to see your HR person right away. With many changes being made, there is more chances for errors to be made.

  1. Raises

If you are in line for an increase in your salary, make sure to get that salary change in writing. Then be sure to check your first paycheck thoroughly to be sure the new check accurately reflects the change.

  1. Tax Exemptions

Everyone completes a W-4 form when they start a new job. Based on the number of exemptions you choose, the W-4 impacts the amount of taxes that are taken out of each paycheck. If you take fewer exemptions, more money will come out of each check, while you take more exemptions, less money comes off the top.

Every time you have a life changing event (i.e. married, divorced, have a child, etc.) you must update your W-4 information. All of these kind of events can affect your taxes.You may make these changes at any time during the year. It is a good practice to review your current W-4 once a year.

In the case of an error in which you receive too much money in your paycheck, notify your payroll department right away.  It may be tempting to remain silent, but the error would be found during monthly or quarterly audits and corrected on a future paycheck.  It’s better to correct it quickly and not use the money than to be surprised on a future payroll.   

Most companies try to do everything absolutely correct, but mistakes can still happen. This is your hard-earned money, so be sure to keep an eye on where it is all going!

Should you have any additional questions regarding this or other employee topics,  contact CyQuest today!

For questions or a free HR Assessment, call us at 404-761-6699 or fill out a contact form and we will follow up with you.

We provide top to bottom HR Consulting, as well as, Government Contracting training and education.