r/personalfinance • u/Practicalbeaver • Mar 03 '23

Check your pay stubs! Employment

I feel like this should go without saying, but it always amazes me how many people I see on here who run into problems because they never check their pay stubs. I’m getting my annual bonus paid out soon and I realized the amount listed on my pay stub was wrong. The CFO had calculated the bonuses incorrectly for anyone who got a mid year raise last year.

I would’ve been shorted $500 if I hadn’t double checked the math.

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u/Furbal1307 Mar 03 '23

10 years in payroll management.

It never ceases to amaze me how many people do not verify their pay via paystub.

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u/changee_of_ways Mar 03 '23

Its because most people have very little accounting knowledge.

In my line of work it never ceases to amaze me that people click on that obviously malicious link.

My brother, a mechanic is always amazed when people he know blow money on models of car that are well known pieces of shit.

I think in modern life there is such a vast amount of "simple stuff" to know that learning it all amounts to putting in the work to become a world class athlete or musician. Its just not actually possible to do that, keep a 9-5 job and have a family life.

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u/JazzlikeDot7142 Mar 03 '23

i look at my pay stub but i never know if it’s right or not. i’m salary but every month my pay stub is different. some months 2500, some months 2300, others 2100. we have a different person in charge of payroll/hr/business every few months or so (the most recent person left last week actually and i wouldn’t have known - my messages to her went unanswered for a few days before seeing a “permanently out of office, no longer working here” message posted on her account). we don’t officially have anyone in charge right now for the past two years either and the title also gets tossed around every few months. so i just always hope my pay is correct and whoever is currently doing the payroll is doing it right.. and before anyone says it, yes, i’ve been looking for a new job.

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u/greenhelium Mar 03 '23

Is your net pay the one that varies, or your gross pay? If your gross pay is different, you should be talking to HR to figure out why your pay isn't consistent. If it's the net pay that changes, you should look to see what specific deductions are different--they will be on your pay stub, which I believe is the point of this post.

Note that if you choose not to do this, you may have some difficult consequences. For example, if your taxes aren't being withheld correctly every month you may owe a large balance when you file your taxes. Put in the time to figure out what's going on.

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u/AuditAndHax Mar 03 '23

I think this can happen at places with semi-monthly paydays (1st & 16th). Because the number of workdays fluctuates each period, so does the paycheck. Annually it works out but it must be hell to budget for

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u/greenhelium Mar 03 '23

I had that thought too, but they mentioned that it was monthly pay.

I suppose the same thing is possible, but everywhere I've seen that did monthly pay just paid 1/12 of the annual salary each month--not something based on the number of workdays in a given month. All the more reason that they should ask their HR about it!

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u/CallMeLargeFather Mar 03 '23

Can be monthly but theyre technically classed as a non-exempt employee (in CA anyway) meaning they get paid an hourly wage

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u/munchies777 Mar 04 '23

Yeah, that's how my monthly pay is. I just get paid 1/12 of my salary on the last business day of every month. February is the same as December even with less days.

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u/Saint-Peer Mar 03 '23

wow, this explains a lot!

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u/AdditionalAttorney Mar 03 '23

Or you might be under laying social security or Medicare which would be hella annoying to figure out at 65

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u/sciguyCO Mar 03 '23

Oof. What's your pay schedule? Something like "every other week" should be simple: gross pay = annual salary / 26. If it's once or twice per month, I've seen "different months having different working days" handled a couple different ways.

My current job (before we switched to bi-weekly) treated each check as "effectively" 86.67 hours of time worked: 40 hour per week * 52 weeks / 24 pay periods. Or basically annual salary divided by 24. So every paycheck was the same, other than first / last when someone switches jobs in the middle of a period.

Another job paid on the 15th and last day of each month, the gross pay amount was pro-rated based on workdays (+paid holidays) that occurred within each pay period. So depending on the length of a month and how many of those fell on a weekend, paychecks would vary up and down. But it netted out right over the course of the year. And I kept an eye on my paystubs to make sure.

Or you've got incompetent and/or poorly trained people working in your employer's payroll department. Can't rule that out...

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u/AdditionalAttorney Mar 03 '23

All the more reason to track it an understand what is changing and why

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u/The_Power_Of_Three Mar 03 '23

It never ceases to amaze you that people trust you?

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u/DickButkisses Mar 03 '23

One phrase I learned early on in my management career that really stuck was “trust, but verify.” I have a lot of folks reporting to me that are very trustworthy and dependable. But it’s my ass on the line if they fail to deliver. Same goes with your pay. Most payroll employees know what they’re doing and are good at their jobs - worthy of trust by any measure. But it’s your rent that’s due, so you verify.

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u/08JNASTY24 Mar 03 '23

For real. To add onto your comment there are other factors. An employee shows up to work feeling 50% groggy and lethargic but don't want to spend a sick day because they can still operate. We save those sick days for when we're 0-25% running to the bathroom every 15 min or have a high fever. It's embedded into the culture of America. Trust doesn't have to do much with it more with the fact that we are human and variables are at play

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u/Notarussianbot2020 Mar 04 '23

My manager always used to say he has to "inspect what I expect".

I'm like bro, just say trust but verify like everybody else.

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u/sarcazm Mar 03 '23

One of the most common mistakes (when I was in payroll) was the General Manager failing to inform me that someone had received a raise.

So, of course, a week later, that employee would come into my office asking about his raise (that I had no idea about).

So, yeah, there are processes that could be improved upon.

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u/SloppyPizzaPie Mar 03 '23

Humans aren’t perfect. You can be great at your job and still make a mistake. But people still need to be adults and verify they’re receiving what they should, especially when it comes to finances. I trust my finance and accounting team, but you bet your ass I check each pay stub.

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u/RegulatoryCapture Mar 03 '23

Also if you are large enough to have a "payroll management" team then I'm going to guess you are large enough that nobody is actually looking at more than a fraction of the actual paychecks before they go out...and that there are probably enough layers that mistakes can easily be missed (e.g. payroll thinks they are cutting the right check, because the manager never informed HR they gave you a raise, or you moved states but HR never got your tax information updated with payroll).

I don't check every single pay stub, but I look on occasion. I'm salaried/exempt so my paychecks only change for specific reasons and I only really need to look closely at the points where something changes (if there are 7 paychecks in a row for $X dollars, and then they switch to $Y, I'm going to look at that check, but not each of the $X ones).

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u/lolwatokay Mar 03 '23

Yes, these people are people too and make mistakes just like you do.

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u/beyphy Mar 03 '23

Payroll is probably more complex than most people think. And it can be easy to make certain types of mistakes. E.g. a bonus might be taxable but a reimbursement is not. It's very easy to put the bonus amount in the reimbursement amount or vice versa for example. This can happen easily if the places to enter that data are right next to each other for example.

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u/metrazol Mar 03 '23

You know what you want better than anyone else. Protect your own interests. Be polite, but be assertive. Payroll has 1,000 people to worry about, you have 1.

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u/wdn Mar 03 '23

I worked at a newspaper in the pre Internet days. Nothing goes to print without being read by at least four different people. Everyone involved is a highly competent professional but if your goal is zero mistakes then everyone who has a stake in it should check it.

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u/CockBlocker Mar 03 '23

You must've worked at a higher end paper cause I could probably link 15 articles in under 5 minutes that have rather drastic spelling and grammar issues from smaller papers. Strangely, they're often about important topics. Perhaps rushed to press?

Edit: you said pre internet days. Maybe I take a good look at my comprehension.

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u/Furbal1307 Mar 03 '23

You’re right - it is an amazing feeling to have 1000s of people trust you, and a big part of why I enjoy my career.

I don’t trust software to do what it is supposed to 100% of the time, and that’s why I educate people to always verify their pay.

So much is automated now that things can avoid audit and review.

For example: Thanksgiving 2021 - - - quarterly payroll software update for clients. It borked the system! All of the sudden pay stubs did not appear to download to employees via the SSO. People who reviewed their stubs consistently were blowing my team up asking why they weren’t getting paid.

Needless to say we now check that the paystubs ARE ACTUALLY VISIBLE TO EMPLOYEES before finalization. Did we have to verify the output to employees was produced for the 3 years beforehand? No, because we trusted the system to do its job.

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u/drthvdrsfthr Mar 03 '23

to be perfect?

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u/FreckleException Mar 04 '23

I regularly have people make mistakes on their W-4. I've been screamed at over not withholding federal taxes from their checks even though they claimed exempt on the form. Wanting people to regularly check their stubs to make sure taxing, wage, deductions etc are all correct helps them to ensure there are no errors. If someone forgets to sign up for health insurance, I can help them retroactively get signed up if they note the missed deduction on the first check, not the 20th because the window has been closed. People move states and never change their address in the system meaning they are never taxed according to the correct state of residence and have to do a song and dance come tax time. That's why you check your stubs.

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u/jedidude75 Mar 03 '23

I've been doing payroll for a little over a year now, and it's amazing the poeple who don't even look. We switched payroll providers last year, and I can see that we still have 10-15% of the company hasn't even created an account in the payroll system.

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u/Legitimate_Wizard Mar 03 '23

Don't they need an account to get their W-2s?

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u/jedidude75 Mar 03 '23

Only if they want to access them online. We got physical copies this year, so I went around and handed them out to everyone in the office, then mailed out the remainder. They could have gotten them early though if they had went in their account, since they were on it since like the 2nd week of January.

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u/Legitimate_Wizard Mar 03 '23

Ah. My last couple jobs didn't give/mail out paper copies. I had to log on and download them from the payroll apps.

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u/424f42_424f42 Mar 03 '23

I mean I very rarely look at my actual pay stub. I have checked it and it was right, and then I get the correct amount in my bank account.

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u/ardentto Mar 03 '23

Well, I was so elated by my new paycheck at the start of my new employment, I didn't look.

Fast forward 9 months, they paid me 30%+ over what I should have made, and asked for it all back. It was discovered the week after pandemic lockdown happened as the entire company took a pay cut to ensure no one was laid off. That added up to a LOT of money reduction in my paycheck. They asked for it all back.

After speaking to an employment lawyer, he summed it like this: "if they underpaid you, would you want that money back? Yes. Same for them." We worked out an agreement and a repayment plan. In the end it worked out but, with the uncertainty of the pandemic, employment, etc., seeing the paycheck drop by nearly 50% was alarming.

Now, I always check my paystub for OVER and underpayments.

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u/Furbal1307 Mar 03 '23

I’m truly sorry that happened to you. There is no easy way to get through a massive overpayment like that. Another item a lot of folks don’t understand is that payroll isn’t generally at fault for messing up your paycheck… sounds stupid right?

With Segregation of Duties and SOX CONTROLS, some businesses don’t allow payroll to process new hires and pay them simultaneously. A lot of data process through payroll integrates from other software or separate modules within the same ERP. We have no control over those areas and wouldn’t know to check if anything was wrong without proper notice or reflex built into the existing payroll system. This is not a blanket statement by any means. Everything is different everywhere.

I have worked through a myriad of overpayments in my lifetime ranging from $100-$100,000. Sometimes legal is involved but typically HR to cover the company’s ass.

The worst was a similar situation or yours but it was maybe 7-8 people. HR sets up everyone in the ERP at this job. The rep set up these new people with both salary and hourly configurations. Why? She was promoted afterwards so fuck if I know. The employees were told they were hourly and used an e-time clock to record their hours. They were being paid whatever from the time clock software and a full pay period salary. They had to pay back months of wages through payroll and from a previous year which complicates matters.

Anyway, I find all this out and I ask HR “Well how the fuck do you miss that as a payroll person?” because how do you?

There were two earnings codes in the system that were used to pay hourly and salary people but with the same prefix. When we reviewed the reports we didn’t consider the fact that someone would have both codes because you really have to try to set someone up as both hourly and salary AND the system ALLOWED IT TO FLOW THROUGH TO PAYROLL. This was fixed quickly as you can imagine. But my team had no access to fix it because we weren’t allowed to. Those configurations were administered by a different department.

We never had a reason to check before and then we did. I felt awful for months because of the hardship and it appearing to be payrolls fault.

Anyway, I’m sorry that happened again. Good that you spoke with an attorney too because a lot of payroll people aren’t wholly aware of the legality behind payroll deductions.

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u/munchies777 Mar 04 '23

Yeah, it sucks, but any area of the company that processes outgoing payments is going to have robust segregation of duties. Fake vendors and fake employees are common ways for people to embezzle money. Big public companies make it a pain in the ass and don't have as many problems, and small private companies go bankrupt or lose tons of money all the time from bad actors like this. Happened to several small business owners I've met personally, and my sample size isn't large.

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u/flowers4u Mar 03 '23

While pay stub verification is needed the real issue is with commission calculations. A lot if compAnies make it really complicated to accurately calculate

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u/TJNel Mar 03 '23

Really sucks that people trust payroll do their job correctly. Crazy

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u/antoniosrevenge Mar 03 '23

Unhelpful and disrespectful comments are not acceptable here. Do not do this again.

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u/juswannalurkpls Mar 03 '23

Been doing it for 40 years, and with technology and direct deposit it’s worse than it ever was.

I had a guy the other day who makes a salary of $250k + commission who didn’t notice his health insurance premiums weren’t coming out the last few months. I found it when I audited the client, and the employee is being an asshole about it. Sorry dude, you’re paying the $10k back that you owe and you can afford it so quit your whining.

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u/blerggle Mar 03 '23

Ya I should have done that. Owe 15k in taxes after not verifying the withholding %

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u/smugri Mar 03 '23

I have an employee who after three years of working for us asked me suddenly for the pay slip. Turned out in the payroll software her e-mail address had a typo, so she worked three years without recieving paystubs. Some people just don't care.

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u/dCrumpets Mar 04 '23

People assume I’m competent at my job, and I try to live up to those expectations rather than blame my customers for my fuck ups 😉

Now you’ve made me paranoid. If you’re underpaying people as an employer, I imagine that’s a big legal issue, so I assume people in these positions aren’t careless.

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u/[deleted] Mar 04 '23

It never ceases to amaze me, that everyone who has a story like this is always shorted money and never overpaid. I was shorted once after a raise but caught it immediately.