Summary: Paystub Codes are abbreviations in paystubs covering various contributions and other elements of employee pay.
Do you ever wish you could figure out all the funny little codes and abbreviations on your pay stubs? When you get your paycheck, you may also get a paystub that is supposed to explain to you how you made money and what was deducted from your pay.
The only problem is that these amounts are all coded using payroll expert jargon, and the average person isn’t able to just figure out what all the codes mean. With a little help and some intuition, however, you can quickly learn what these paystub codes mean and what they’re for, so you can better understand your pay breakdown.
What Are Paystub Codes?
Paystub codes are short forms and abbreviations found on paystubs that explain the sources of your earnings and the types of deductions taken from your pay.
Paystubs are records of employee earnings and deductions. Through the Fair Labor Standards Act (FLSA), the federal government requires all employers to keep track of their employees’ hours worked each week, overtime hours, deductions, and wages paid for each pay period.
However, the FLSA doesn’t require that these records be given to employees via pay stubs. Many state governments do make employers provide pay stubs, but have varying standards and requirements, and other states don’t mandate pay stubs at all.
Still, it’s best practice to keep employees well informed of their earnings and deductions. For these reasons, companies create their own codes for the different items that can appear on their employees’ pay stubs. These may also be called payroll codes because they’re used by each company’s payroll department.
All About Paystub Codes
Many organizations standardize their codes by choosing only 2-letter or 3-letter combinations for all items. These paystub codes are often hard to interpret, but they take up less space on documents and are easier to process. Other companies use longer abbreviations that resemble the items they represent and are easier for employees to interpret.
In any case, most codes can’t be easily worked out and have to be learned instead. At the same time, many companies use a lot of the same code for the same things. This happens for two reasons.
First, many codes or abbreviations just make sense, like OT for overtime, and therefore, they get used by everyone. The other reason is that payroll, HR, and accounting professionals move around during their careers.
To make life easier for themselves, they use the same codes when they work for different employers, if possible. Why reinvent the wheel? While companies can make their own, it’s easier to use paystub codes that professionals have already developed elsewhere.
For the most part, paystub codes are divided into two main types. There are earnings codes for the different types of things that bring money into your paycheck, like REG for regular pay and OT for overtime pay.
There are also deduction codes that refer to deductions from your pay, like FIT for federal income tax and HSA for contributions to your health savings account. There may be other codes on your paystub, like YTD, which stands for year-to-date, and TOT for total. However, there are a few of these, and they’re normally common codes and abbreviations you already know.
Why Use Payroll Codes?
The benefits of payroll codes are many. The reason these codes were developed is that, in the past, pay stubs were actually physical stubs of paper. These were detachable sections that were torn off employee paychecks and cashed.
As the name implies, they were small and stubby, so using short payroll codes was created as a space-saving measure. However, they’re still used today even for electronic pay stubs for the following reasons:
They’re convenient. Using shorter codes still saves space and also makes it faster and easier to record and report on the different types of earnings and deductions on employee paychecks.
They’re easy to sort through. If you want to find information and you need to sort through payroll records that say things like “healthcare expenses reimbursed by the employer”, it’s going to take a lot more time and effort than if the records say HCR instead.
They improve payroll accuracy. Using standardized codes within a company helps keep things organized so that employee earnings and deductions don’t get mixed up or misplaced. Paystub codes also help when preparing payroll data for reports and analysis.
They’re easier for professionals to understand. A company’s accounts need to be audited by external auditors, and internal experts also perform payroll reconciliation regularly. Codes make it easier to categorize data and locate errors.
Common Paystub Codes
The number of codes used on pay stubs in the US is essentially limitless since businesses can create their own codes if they need or want to. At the same time, some codes are used quite commonly across lots of businesses. Some of the most commonly used ones include:
Common Earnings Codes
Earnings codes reflect the different sources of income you can find on your paycheck.
- ADM – Administrative leave pay
- BON – Bonus pay
- BRV – Bereavement pay (also BRE)
- CAR – Car allowances
- CNT – Contract payments
- CMP – Compensation pay in lieu of time off
- COM – Commissions
- DCR – Dental care reimbursements
- EXP – Expense reimbursements
- FML – Family and medical leave pay
- HCR – Healthcare reimbursements
- HOL – Holiday pay
- LIF – Life insurance contributions
- MOV – Moving expense reimbursements
- OT – Overtime pay (also OTP)
- PTL – Pay for parental leave
- REG – Regular earnings
- SCK – Sick leave pay (also SIC)
- TIP – Tips assigned to you
- TUI – Tuition reimbursements
- VAC – Vacation pay
Deduction Codes
Dedication codes represent the different reasons money may be subtracted from your pay.
- BKY – Bankruptcy levies (also BKR)
- BLF – Basic life insurance
- CHD – Child support payments
- DEN – Dental insurance premiums
- FIC – FICA (Federal Insurance Contributions Act) deductions for Social Security and Medicare)
- FIT – Federal income tax (also FED)
- FSA – Flexible spending account contributions
- GAR – Garnishments
- HSA – Healthcare spending account contributions
- IRS – Internal Revenue Service levies
- LTD – Long-term disability withholdings
- MED – Medical insurance premiums
- RSP – Retirement savings plan contributions
- SAV – Salary advances
- STL – Student loan deductions
- STD – Short-term disability withholdings
- SUI – State unemployment insurance deductions
- S_ _ – State tax withholding (the two blanks are replaced by the two-letter code for your state)
- VIS – Vision insurance premiums
What To Do If You Don’t Recognize Paystub Codes
While we’ve just seen the most commonly used paystub codes for businesses in the US, your company may not use many of them. You may also have uncommon earning sources or deductions on your particular paycheck. Unless you’re a payroll expert, you won’t know all of the codes that will turn up on your pay stubs throughout your entire working life.
If you come across codes you don’t recognize or understand, you have a couple of options to help you. You can call or visit your company’s payroll department or the person in charge of payroll to ask what certain codes mean. Even better, you can ask for the key to your company’s paystub codes.
This is a master list explaining all the codes used by payroll professionals. This document is no secret and should be freely available to all employees to help them understand the breakdown of their pay.
Paystub Codes for Employees
As an employee, you should familiarize yourself with the codes you regularly find on your pay stubs. This will help you keep track of your earnings and deductions and let you more easily check your pay to make sure that it’s correct.
If you see something on your paystub that you don’t understand, be it an unusual code or a possibly incorrect amount, don’t be afraid to contact your payroll department and ask for clarification.
Paystub codes make payroll professionals’ work easier, but they should also be useful to you and help you quickly figure out the earnings and deductions on your regular paychecks.
To generate paystubs for employees, complete with the right codes, check out our paystub generator.
FAQ
No, most businesses can choose their own codes, and while many codes are commonly used for the same items, there can also be major differences. For example, federal income tax can be written as FIT, but also FTW (federal tax withholding). It’s also possible that within a single company, paystub codes can be changed over time in case new ideas are introduced or the payroll department is overhauled completely.
No, this is not always the case. Short codes like these can be convenient, but they may also be difficult to use to convey all the necessary information. For example, jury duty pay can be coded as JUR, but these earnings can be tax-exempt or not. Longer codes like JURX and JURNONX could be used to add clarity in these situations and also make it easier for non-payroll professionals to understand what various codes mean.
Each employer needs a different code for every different earnings or deduction type. Most will have 50-100 codes on file, even if many are rarely used.