Summary: Payroll codes are abbreviations used in paystubs and other payroll compliance documentation.

Have you ever received a paystub that broke your earnings and deductions down into confusing amounts using unknown codes? If you’ve found your pay slip nearly undecipherable, you’re not alone. It’s rare that employees know all of the various codes that can show up on their pay summaries, and even if they learn them for one employer, they might be totally different elsewhere.

In this quick review, we’re going to talk you through what payroll codes are, what they’re used for, and how to recognize many of the major codes in use by employers everywhere.

What Are Payroll Codes?

The simple answer to this question is that payroll codes are short codes or abbreviations used to indicate the types of earnings and deductions on your paycheck. Instead of writing out full terms like “Long-term disability”, your employer’s payroll department can easily write “LTD” to save space and time.

However, they could just as easily use the code “LD” for this same item. That’s because payroll codes are by no means standard across the world, the country, or even the state. Instead, employers can use their own code, which may or may not be different from that used elsewhere.

At the same time, however, there are a lot of common codes that will pop up on pay stubs all over the place. They’re usually used for items that are standard on all paychecks, and because payroll specialists move around between employers, they often try to introduce or use the same codes they used with their previous employers.

Is it necessary for you as an employee to know all the payroll codes found on your pay stubs? Not at all. In fact, it’s likely that even your company’s payroll specialists have to look up a code of two once in a while.

However, if you see a few similar items on your pay stubs every month, it’s going to be a big help to familiarize yourself at least with these codes. That way, you can very quickly read your paystub and understand exactly where your money came from or went to. This makes it faster and easier to check if your pay is correctly calculated and also keep track of your personal finances. 

If you see a code that’s not listed below on your paystub, you can always ask your payroll department for a list of the codes it uses. You might already be able to guess that “OT” means “overtime,” but most people wouldn’t be able to guess that “MVG” means a “non-taxable moving expense reimbursement”!

Commonly Used Payroll Codes

While there can be literally hundreds of codes used on pay stubs in just the US alone, we’re going to focus here on the most common codes that you’re likely to come across. To make information easier to find, we’ll alphabetize them and separate them into earnings and expense deduction codes.

While it’s most common to use two and three-letter codes, some employers choose us use longer codes that are similar to abbreviations and therefore easier to read. The most common will be included here.

Earnings Codes

Earnings codes are used on the different items that represent your possible sources of income from your employer. These codes are associated with the positive amounts in your pay, so it’s great if you’re familiar with the most common codes:

  • ADD – Additional pay
  • ADM – Pay for administrative leave
  • BON – Bonus pay
  • BRN/BRV – Bereavement pay (also BRVMT)
  • CAR – Car allowance
  • CNT – Contract salary
  • CMP – Compensation for unused time off (also COM or COMP)
  • COM – Commissions 
  • DCR – Dental care reimbursement
  • EXP – Expense allowance (also EXPN)
  • FML – Pay covered under the Family and Medical Leave Act (also FMLA)
  • GFC – Gift certificate
  • HCR – Healthcare expenses reimbursed by your employer
  • HOL – Holiday pay
  • JUR – Jury duty pay (also JDE or JDN for exempt and non-exempt earnings)
  • MVG – Moving expense reimbursement, non-taxable (also Mov
  • OT – Overtime pay
  • PTL – Parental leave pay
  • REG – regular earnings (also RegPay)
  • SIC – Pay for sick leave (also SCK)
  • TUI – tuition reimbursement for training (also TuiReim)
  • VAC – Vacation pay

Deduction Codes

Deduction codes are used to indicate where the different amounts deducted and withheld from your paychecks go. These can include tax deductions from your full pay, pre-tax deductions that are taken off before your pay is taxed, or post-tax deductions that apply to your salary after taxes have been deducted. The most common codes you’ll encounter are:

  • BKR – Levies to repay debtors under conditions of a bankruptcy (also Bankrpty, BKY)
  • BLF – Basic life insurance
  • CHD – Court-ordered deductions for child support payments (also CHD SU or CHLDSP)
  • DEN – Contributions to dental insurance premiums 
  • FIC – Deductions for FICA (Federal Insurance Contributions Act) taxes (also FICA or SSM for Social Security and Medicare)
  • FED – Federal income tax withholding (also FWT, FIT, or FITW)
  • FSA – Pre-tax deductions to your flexible spending account
  • GAR – Court-ordered garnishments of your pay 
  • HSA – Pre-tax deductions to your healthcare spending account
  • IRS – Tax levies on your pay imposed by the IRS
  • LTD – Long-term disability withholdings from your pay
  • MED – Deductions for medical insurance premiums
  • RSP – Deductions for your retirement savings plan
  • SAV – Salary advances
  • STL – Deductions for your student loan (also StdnLoan)
  • STD – short-term disability withholdings from your pay 
  • SUI – Deductions toward state unemployment insurance
  • SXX – State tax withholding with the XX replaced by the two-letter code for your state (ex., SNY for New York and STX for Texas).
  • TXL – Tax levies imposed by state and local tax authorities
  • VIS – Premiums for vision insurance (also Vision)

Benefits of Using Payroll Codes

There are a lot of good reasons why payroll departments use payroll codes, and this is why they’re common across businesses of all sizes. Payroll codes facilitate:

  • Improved accuracy: These codes help to create clear categories so that expenses and deductions can be easily managed and calculated.
  • Faster processing: Payroll specialists use these codes to work quickly and reduce the complexity of their work. They also help to make their databases more easily searchable.
  • Easier reporting: Codes make grouping and analyzing data easier so that payroll reports can be generated more readily.
  • Compliance: Payroll codes are used to identify earning and deduction items in a regular way which is often required by law so employees know where their pay is going.

What Should You Do If a Payroll Code Is Wrong?

Once you familiarize yourself with the most common payroll codes you find on your pay stubs, you can not only read them more easily but also quickly spot errors. You may see an amount that was deducted from your paycheck but was supposed to be paid to you.

If this is the result of a payroll code error, you can quickly recognize the wrong code and contact your payroll department. Let them clarify and let them know your concern, even suggesting the code you think is correct.

All You Need to Know About Payroll Codes

There’s no need to memorize all of these codes unless you’re on track to become a payroll specialist. As an employee, you can ask your employer’s payroll department for the codes they use so that you can quickly decode and understand the breakdown of your pay and deductions on your pay stubs. That way, you can keep track of your personal finances and also check to make sure that your employer has paid you or withheld taxes correctly.

Remember that payroll codes can be different in different organizations, but you can always request a list of these codes from your payroll department to help you learn what their codes mean.

FAQ

No. The examples we’ve shown above involve two and three-letter codes. While this is the most common way to create payroll codes, some organizations use much longer abbreviations to make their codes more easily understandable.

This depends on your organization. Newer companies may decide to update their payroll systems when they experience growth and may therefore change to use codes that are different from what they started out using. Older, more established companies rarely change their codes unless a type of earning or deduction legally changes name according to the tax authorities.

Yes, they generally do because these they’re simply easier to enter and therefore save work. Essentially all automated payroll systems use codes because they’re more easily searchable when performing analytics or creating reports.