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Unpleasant surprise in the paycheck

February 4th, 2007 at 08:17 am

I was looking over DH's first paystub of the year and noticed that the company didn't withhold a contribution for 401k. Grrrr...this company is pretty poorly managed, and we had a big fiasco at the end of the year when they didn't have the open enrollment information available until Dec 15 -- after we'd already left the country to visit my inlaws -- and they required the forms back before Dec 31. We had to sign up for health insurance without having any information on how much the premiums would be, and I still don't know whether we've got any LTD coverage. Looks like you had to re-enroll in the 401k instead of your previous contribution just continuing automatically.

So I told DH about it and didn't think much more about it until I sat down to fund our envelopes for the coming month. The January paychecks were $250 less than normal. Very odd -- without the 401k contribution it should've been higher than normal. Did our medical premiums go up that much? So I dug out an old paystub from the end of 2006. The medical premium was only $20 more. The main difference was that the new paycheck had $300 withheld for something called OASDI. This didn't ring a bell until I went to www.paycheckcity.com -- it's social security.

There is a cap on how much income is taxed for social security, and apparently instead of spreading the payments evenly across the year, we have this withholding until about October and then suddenly get a larger paycheck. Unfortunately I based our budget on a paystub from November, so now I have to find a way to trim $500/month. Ugh. Although I'd prefer to have a simple budget with the same contributions to each envelope each month, I think I may have to make an exception for the envelopes for Christmas gifts and IRA contribution, weighting them more heavily at the end of the year.

2 Responses to “Unpleasant surprise in the paycheck”

  1. yummy64 Says:

    That would be the perfect thing to do. Now you know you get more in the pay at the end of the year budget some of the expenses for then.

    I have the same situation with two different withholding taxes. My pay always goes up a fair amount at the end of the year. Works well for me to budget Xmas out of those (as well as a once a year AAA payment).

  2. daylily Says:

    How very frustrating. I had something very similar recently. I was permanently downsized from my job on Nov 30. I'd known about it for months so we planned to leave the country for most of December. Before we left, I paid the Cobra premium so that we'd still have healthcare. When I returned I found out that they had a year end enrollment session that started Dec 9 and ended Dec 22. Since I wasn't around they changed my policy to one that was much higher!!!

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