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What You Didn’t Know About Getting Paid

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When you applied for your job, you agreed to make a certain amount, but that’s probably not the same amount you see on your paycheck. So, where does it all go? There is a lot of behind the scenes work that happens before you get your check. There are certain deductions and taxes that have to be withheld. Thank goodness someone knows what they’re doing, right? Next time you see your payroll specialist, thank them.

Where is my paycheck going?

Everyone who receives a paycheck notices a big difference between amount earned and amount received. To help you better understand where all your money is going I’ve compiled a list, with a little help from a payroll pro, of everything that is withheld from your paycheck.

1. Withholding allowances – You got the job! Congratulations! Now you have a bunch of paper work to fill out, and one is Form W-4, the Employee’s Withholding Allowances Certificate. This particular form determines how much money will be withheld in federal income tax from your paycheck. What are withholding allowances? Basically, you need to know that the more you claim the less that is withheld in federal income tax each pay period. Hence why this form is so important.

You may wish to take an allowance for a number of reasons. Maybe you are single and only have one job – one income – or maybe you are married and you have one job and your spouse doesn’t work and you need the extra money each paycheck. However, it is possible to claim zero allowances. In this case, you have the maximum amount withheld; however, you have an opportunity to redeem more back on your year-end tax returns.

2. State Income Taxes – Forty-one out of 50 states require these taxes to be withheld from an employee’s paycheck. Those states for which this tax does not apply are Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming.

3. FICA – To quote the popular nineties TV series, Friends, “Who’s this guy FICA and why does he keep taking all my money?” Maybe many of you feel this way and you’re not alone. All deductions and taxes withheld from your income are visible on your paycheck but often times they are abbreviated, making it hard to understand what they mean. Under FICA or the Federal Insurance Contribution Act, 12.4% of earned income up to an annual limit ($113,700 as of 2013) must be paid into Social Security and 2.9% must be paid into Medicare. Good news, if you’re a wage or salaried employee, you only pay half of this tax and your employer picks up the rest.

4. Benefits – There may be other deductions that come out of your pay. For instance, maybe you selected to add benefits when you joined your new employer. Now a portion of your check is taken out to pay for medical and dental insurance. Maybe you are putting money aside into a Flexible Spending Account or hopefully your employer gives you the opportunity to make contributions to a 401(k) plan.

A 401(k) plan is a feature allowing employees to contribute a portion of their earnings to individual profit-sharing accounts. There are two ways one might elect to participate; either through a traditional 401(k) plan or a Roth 401(k) plan. With a traditional 401(k) your contributions are made pretax, meaning you can subtract them from your taxable income and lower your taxes for the year the contribution was made. You are not free from having to pay taxes, however. You will have to pay income taxes on the overall contribution when you withdraw the money from your account. With a Roth 401(k), your contributions are made post tax, meaning you pay income taxes upfront and your contribution grows tax free. There is no right or wrong choice, it is entirely up to you what you choose, but taxes are a key difference and certainly something to consider.

Getting paid is important to all of us and in the end there are multiple reasons why what you make may be different from what you actually take home. Therefore, it is important to understand how and when we’re paid. Hopefully this blog gave you more insight into where some of your money goes. Now, where the rest of it goes, well, that’s up to you.



Author Bio: Lauren is an enthusiastic writer who is passionate about numerous topics surrounding the HCM industry including talent management and acquisition, technology, document management and leadership, just to name a few. Lauren has been with Paycom for over a year and has taken on roles as a blogger, social strategist and community relations coordinator. In her spare time she enjoys DIY“ing,” exploring the city and keeping up with her two dogs, Deacon and Cookie.

Office Drama

It’s an Office, Not a Theater: Managing Office Drama

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Office drama is a distraction that could be costing your company millions. In her new book, No Ego, drama researcher and New York Times best-selling author Cy Wakeman defines drama as any disruptive behavior or thought process that takes energy away from results or a great work climate.

Need to minimize workplace drama?

Listen to the HR Break Room podcast episode “It’s an Office, Not a Theater: Managing Workplace Drama” with author Cy Wakeman.

Drama is expensive

According to Wakeman, employees spend nearly three hours a week on workplace drama, totaling an estimated 816 hours being wasted per year. This isn’t just a nuisance that hurts employee morale and eats up management’s time, but also lowers productivity and, ultimately, profits. With so much at stake, it’s important to remember that organizations can minimize this type of financial drain.

Egos fuel the fire

Wakeman identifies five key causes of workplace drama:

  1. lack of accountability
  2. lack of engagement
  3. withholding buy-in
  4. resisting change
  5. ego-driven work environment

Each cause manifests itself differently, but perhaps the ego’s most common way of creating tension is through employee venting allowed by open-door policies.

Creating an approachable environment is important, but often, in an effort to give employees access, members of management invite toxic conversations that can last as long as 45 minutes, according to Workman’s research. Instead of colluding or sympathizing with employees, the best way to minimize the drama is to bypass their ego; train managers and employees to reflect on their challenges instead of blasting the faults of others.

Self-reflection: the cornerstone of accountability

Becoming more self-aware and learning how to edit your own story is a critical life skill that helps minimize drama, personally and professionally. Most times, the stress that arises from drama does not come from reality, but from a story we make up about our reality. If we hold ourselves accountable to the truth, we realize that most of what we are upset about did not even happen.

Recruit for a low-drama workforce

Recruiting is one way to reduce workplace drama. It is crucial to find people who not only perform, but are able to stay emotionally ready for what’s next.

Finding highly accountable top talent can be challenging, which makes implementation of an applicant tracking system essential. These prospective employees are in high demand, and recruiting them successfully requires swift, seamless action before they go somewhere else. Organizations lacking the tools to attract and recognize quality applicants could be at a disadvantage.

HR’s role in minimizing drama

A big opportunity exists for HR to cut the cost of workplace drama and, more importantly, put an end to the entitlement that feeds such conflicts. HR needs to be especially careful about its employee engagement philosophies, because engagement without accountability creates entitlement. HR should not be afraid to challenge conventional wisdom that does not yield positive results. For example, one popular idea is that employees can be engaged by perfecting their circumstances. This may sound great on paper, but in actuality, there is no way you can perfect their reality; instead, you grow them to become better equipped to live in their reality.

HR can create surveys to send to top performers in order to get a better understanding of their day-to-day environment, including pressure points. Using this data, HR can implement trainings that enrich the mental processes of managers, and eventually, all employees within the company.

Office drama may be an inevitable part of today’s workforce, but by training managers and employees on the right mental processes based on self-reflection, your organization can save countless hours of employee time and untold wasted dollars.

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Posted in Blog, Featured, HR Management, Leadership, Talent Management

Chelsea Justice

by Chelsea Justice


Author Bio: Chelsea is co-host Paycom’s HR Break Room podcast, editor-in-chief of its corporate culture magazine, Paycom Pulse and is Paycom’s communications supervisor. During her more than eight years in marketing, corporate training and communications, she has created hundreds of magazines, training guides, videos and webinars for multiple industries. In her free time, Chelsea is planning her next travel adventure, perfecting her most recent baking recipe, devouring a good book and, above all, spending time with family.

Political Conversations

Knowing the Limits of Political Conversations at Work

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Having political conversations in the office can be difficult, especially in the wake of a divisive post-election season. When employees from various walks of life work in the same space, there’s more opportunity for political disagreements and potentially toxic office conversations.

Determining how your organization will handle political activity in your organization remains a blind spot for many organizations. A 2016 SHRM survey reported that 72% of HR professionals said their companies discourage political activities in the workplace, but only 24% of organizations have a written policy. To further muddy the waters, 8% reported having an unwritten policy that was not communicated explicitly.

 For more tips on how to manage political conversations at work, check out our  HR Break Room podcast episode, Political Conversations at Work: Should HR Pass It or Veto It

These heated conversations make way for an important question for employees and HR to consider: What are your organization’s rules and limits in participating in politics?

Private institutions are king.

It’s important to note that not all organizations operate under the same rules and regulations when it comes to engaging in political discourse or being active in political campaigns. For instance, because of the U.S. Supreme Court’s Citizens United ruling in 2010, private employers have the right to make their opinions and preferences known to both employees and the public.

This ruling also gives private organizations a great deal of leeway in handling political discourse and policy on their own terms. They are not prohibited from restricting employees’ speech and even can have employees participate in political campaigns on the clock.

What’s even more surprising? The Bill of Rights doesn’t protect workers in the private sector from being fired over speech in or outside the workplace – it only prevents the government from infringing upon citizen’s speech.

What can nonprofits do?

The rights of private organizations differ quite a bit from the rights of nonprofits. Organizations that want to maintain the highly sought-after 501(c)(3) tax-exempt status are forbidden from participating in partisan “political campaigns” or else risk having that status revoked by the IRS.

However, the definition of “political campaign” can be ambiguous, especially when nonprofits are allowed to participate in such nonpartisan activities as voter registration drives and legislative advocacy programs.

Here’s a quick breakdown of nonprofit advocacy groups and what they can/can’t do in the political arena:

  • 501(c)(3) groups – are religious, charitable, scientific or educational organizations and are not supposed to engage in any political activities, though some voter registration activities are permitted.
  • 501(c)(4) groups – are social welfare groups and organizations that may engage in political activities, as long as these activities do not become their primary purpose.
  • 501(c)(5)groups – are labor and agricultural organizations that may engage in political activities, as long as these activities do not become their primary purpose.
  • 501(c)(6)groups – are business leagues, chambers of commerce, real estate boards and boards of trade may engage in political activities, as long as these activities do not become their primary purpose.

 

The next three nonprofit groups exist FOR political purposes:

  • 527groups – are tax-exempt groups organized under section 527 of the Internal Revenue Code to raise money for political activities. These groups are typically parties, candidates, committees or associations organized for the purpose of influencing an issue, policy, appointment or election, be it federal, state or local.
  • Hybrid PACs (Carey Committees) – these nonprofit committee groups are not affiliated with a candidate and has the ability to contributing funds to a candidate’s committee and to make independent expenditures, as long as they have separate bank accounts for each purpose.
  • Political Action Committee (PAC)– these nonprofit committees raise and spend limited money contributions for the purpose of electing or defeating political candidates.

 

To know how to make the best company policy at a nonprofit, it is important to understand how the IRS determines these terms. The IRS uses what it calls “facts and circumstances” to determine whether nonprofit organizations are engaging in partisan political activity. This means certain activities not normally considered political in a non-election year could be considered political two months before or after an election.

When determining how your 501(c)(3) organization gets involved in political activities, it’s crucial to consider the nature and goals of the activity before deciding whether it is worth the potential risk.

Few organizations have policy.

Whether a Fortune 500 company or a local nonprofit, knowing exactly what your organization’s limits are in participating in politics helps employees understand expectations and act accordingly. These allowances and their boundaries also can help you determine how to handle these political conversations when they inevitably arise at work.

If you’re interested in learning more about how to manage these sensitive political topics, please subscribe to Paycom’s HR Break Room podcast and listen to our latest episode with special guest Robin Schooling.

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Posted in Blog, Compliance, Employment Law, Featured, Leadership, Nonprofits

Caleb Masters

by Caleb Masters


Author Bio: Caleb is the host of The HR Break Room and a Webinar and Podcast Producer at Paycom. With more than 5 years of experience as a published online writer and content producer, Caleb has produced dozens of podcasts and videos for multiple industries both local and online. Caleb continues to assist organizations creatively communicate their ideas and messages through researched talks, blog posts and new media. Outside of work, Caleb enjoys running, discussing movies and trying new local restaurants.

Office Drama

5 TV Shows With Worse Office Drama Than Your Workplace

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Office drama can be a stressful part of any job. And human conflict is a tale as old as time. But when workplace theatrics start to look eerily like the latest episode of Game of Thrones or Mad Men it’s probably time to take closer look at what’s happening with your employees. Let’s take a look at five of the best television shows that have worse drama than your own office and what we can learn from them.

Need to minimize Workplace drama? Listen to the HR Break Room podcast episode It’s an Office, Not a Theater: Managing Workplace Drama with author, Cy Wakeman.

1. The Office

Nothing beats a classic, and we all know The Office’s Dunder Mifflin is nothing short of an HR disaster. This office is filled with the least productive staff on television. With all of the gags, quirks, and of course, video documenting, it’s a small miracle Dunder Mifflin kept any of these employees on staff for more than a week.

The drama in The Office is silly and usually lighthearted. But if we examine the show through the real-world HR lens, it’s easy to see how that drama negatively impacted productivity. Over the course of nine seasons, surely some work was done, but the leadership in the office – including Toby, the HR representative – could never keep Michael, Dwight, Pam or the rest of the team focused on the task at hand. The takeaway here is that drama – no matter how big or small – steals valuable time away from your people. Leaders should remember to check in with their people via one-on-ones to ensure that drama is not distracting employees from their work.

2. Mad Men

Don Draper’s swagger and charm may be irresistible, but we could do without the office dynamics of his ad agency, Sterling Cooper. Mad Men’s top-notch writing and 1960s aesthetic combine to tell a story about how one leader’s personal issues can spill into the office and destroy employee morale.

Mad Men is undeniably one of the most respected TV shows from the last decade, and you cannot deny its class, but Sterling Cooper is the posterchild for office drama and HR nightmares. Leadership always sets the tone. Don Draper’s toxic lifestyle influenced the unhealthy environment. Don’t be like Don Draper; lead with respect!

3. Halt and Catch Fire

If we jump forward a decade or two to the 1980s, a different type of office drama emerges in Cardiff Electric, a PC company. The show is set during the height of the personal computer race and stars Joe MacMillan – an engineering prodigy – who finds a fatal flaw in IBM’s computer. Joe’s ambitions are fierce and so is the “all work and no play” mentality he uses to lead his team. This leadership style led to burnout, sellout and even betrayal from members of his team.

Big ambitions are essential to driving a successful company, but if Halt and Catch Fire tells us anything, it is that your people’s happiness is important, too.

4. Silicon Valley

Let’s step away from the past to look at a show that’s a little more cutting-edge. Silicon Valley takes viewers into the insanity of a California tech start-up. Sure, there are fun ideas galore, but when the work of building and implementing a product begins, things get messy between Richard, Erlich and Nelson – and a comedy of errors ensues.

If there is anything to take from the absurd events that occur on Silicon Valley it is that HR is always essential in helping prevent disasters, even in start-ups.

5. Game of Thrones

Game of Thrones might seem like a real stretch, but hear me out! The dark and twisted Westeros adventures of Daenerys Targaryen, Jon Snow and Tyrion Lannister may seem as far away from your workplace as any TV show, but if you look closer, the power struggle for the iron throne may have more in common with your work than you imagined.

In Game of Thrones characters are always living in fear for their life. This high-stakes environment often leads to characters throwing each other under the proverbial bus, making secret alliances and plotting to usurp their superiors. The fear-driven culture of Westeros is not pleasant for anyone with aspirations for a happy life.

Creating a healthy culture built on wholesome core values is essential to making a successful organization filled with happy employees. When investigating and building your own culture, don’t let those Westerosi dynamics creep into your organization’s mission.

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Posted in Blog, Featured, Leadership, Talent Management

Caleb Masters

by Caleb Masters


Author Bio: Caleb is the host of The HR Break Room and a Webinar and Podcast Producer at Paycom. With more than 5 years of experience as a published online writer and content producer, Caleb has produced dozens of podcasts and videos for multiple industries both local and online. Caleb continues to assist organizations creatively communicate their ideas and messages through researched talks, blog posts and new media. Outside of work, Caleb enjoys running, discussing movies and trying new local restaurants.

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