Paycheck Info

I started an interesting financial habit about 5 years ago.  I’m not sure if it’s good or necessary for building wealth, but I’m going to share anyway.

It’s simply this.  I review and recalculate each and every paycheck  I get.

I know this sounds very laborious, but in fact it takes about 2 minutes per paystub.  And I only do it every other month.

The process is that I get my paystub detail from our company website and copy/paste it into an excel workbook that automatically does a bunch of checks and recalculations.  And then that information appears up on a summary tab that shows all the paychecks I’ve received over the past several years.  As a result, I can trend all my income details to understand the dynamics.  I can share the workbook if anybody is interested.

Here are the benefits.

1.) After working in public accounting and auditing several company’s payroll, I know first hand that payroll mistakes get made all the time.  Often time for months and years because employees don’t check their paystubs.  So, it’s just a good thing to make sure you’re getting paid correctly.

2.) I have more visibility into my gross salary and all the deductions for taxes, HSA, health insurance, etc.  Before I started doing this, I wasn’t really aware of how much we were paying in taxes.  It’s startling and something to be very very aware of.  Another reason to own rentals.

3.) Since I now know the algebra of how my paycheck is calculated, I can better estimate any changes to future paychecks.  For instance, I can estimate the impact of W4 changes, the tax withholdings from my bonus, etc.

Anyway, I don’t know if this is helpful, I thought I would mention it.

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