Can you explain my pay stub? How do I save?

Pretax deductions are tax free-earnings! Pretax benefits are a great tax break for working people but the math can be confusing!

Let's talk about what Alice looks like on your paycheck.  There are two ways to spend with Alice. Alice uses the spending history on your Alice Card or your Connected Card ( your own credit or debit card)to set your benefit amounts automatically. Both ways to spend will save you the same amount of money. Each way to spend looks a little different on your paycheck:

If you spend on your own Connected Cards:

Pretax Deduction:

• A pretax deduction means this amount of money was set aside before taxes were calculated.
• Most workers in NYC or LA only keep 80% of wages & tips. The rest—20%—goes to taxes.
• Pretax deductions are tax-free earnings! The amount is based on what you spend on parking & transit.
• You keep 100% of your pretax deduction instead of 80% by not paying Federal, State, Local, Social Security, and Medicare taxes on those earnings.

After-tax Addition: (often shown as “reimbursement”)

• After the taxes come out, Alice puts the amount set aside back.
• Your pretax deduction goes straight into your take-home pay
• If your deduction was $100, you got $100 as a reimbursement

If you spend on your Alice Card:

Pretax Deduction:

• A pretax deduction means this amount of money was set aside before taxes were calculated.
• The amount Alice sets as pretax deductions are never taxed!
• Most workers in NYC or LA only keep 80% of wages & tips. The rest—20%—goes to taxes.
• You don't pay those taxes on the pretax deduction amount Alice sets for you!
• You keep 100% of your pretax deduction instead of 80% by not paying Federal, State, Local, Social Security, and Medicare taxes on those earnings.

Alice Card balance:

• Your pretax deduction goes directly to your Alice Card to cover what you spend.
• You don't have to pre-fund your Alice Card, its funded by tax free money from your paycheck.
• You won't see an after tax addition added to your check, because it was added to your Alice Card.

If you spend on your Alice Card AND Connected Card:

Pretax Deduction:

• Pretax deductions are tax-free earnings!
• Pretax Deductions are based on the amounts you spend and are protected from taxes.

After tax addition + Alice Card balance:

• Your tax free earnings are split up: part of it covers what you spend on Alice Card and the rest goes into your paycheck.

But where does it show what I saved?

This math is not spelled out on your paystub. Restaurant and frontline workers typically lose about 20% to taxes. So, if you have a pretax deduction of $100, you will be saving about $20.

Alice gives you an estimate of your savings each time you confirm a purchase. Alice will also text you with a reminder of what you spent and the total estimated savings that pay period.

The actual amount you save depends on your personal tax and income situation. The U.S. federal income tax rates range from 10% to 37% (State and Local Tax rates vary).

How can I make sure I did save money?

One simple but effective way to make sure you did save money is by comparing your paychecks. Compare a paycheck with Alice to another one that didn’t have Alice on it. Make sure the two paychecks have the same hours and pay rate. You’ll see that you’re paying less in income taxes on the paycheck with Alice deductions.