If you earn an income in the United States, you are legally obligated to pay taxes on that money. Most people have those taxes taken out of their paycheck immediately. The amounts of these taxes are listed on your paycheck stub as individual deductions, and while they are each assigned names, not everyone knows what those names stand for.
This accounts for the federal taxes you owe the government each year. It is sometimes abbreviated as Fed Tax, FT or FWT, and the percentage of your check it takes varies depending on how many allowances you claim from the government (which generally reduce the amount of taxes you owe).
Similar to federal taxes, this tax goes to the state in which you reside and work. This tax operates similarly to federal tax, with the amount taxed depending on the allowances claimed. It is abbreviated as St Tax, ST or SWT on your paycheck stub. Not all states charge an income tax, so not all U.S. citizens have to pay this tax.
Social Security (FICA)
Also abbreviated as SS, SSWT or OASDI, this goes to a government-regulated retirement fund for senior citizens. Approximately 6.2 percent of your check before taxes is paid into the social security fund. Social security is designed to be paid back upon retirement to help you subsist without a steady income.
This may read as MWT or Med on your paycheck stub, and it is a government-regulated health care option that keeps your medical expenses covered when you reach retirement age. The tax is 1.45 percent of your paycheck before taxes.
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