On a pay stub, “FIT” represents federal income tax. This is the amount an employer is required to deduct from an employee’s pay in order to pay taxes.
In the United States, the Internal Revenue Service determines federal income tax liability. FIT is applied to all of a taxpayer’s taxable income for the year. Not all taxpayers are assessed the same rate. Certain entities, such as companies and trusts, can change their tax rate via deductions and credits. Other groups, such as nonprofits, can petition for tax-exempt status.
Some states also have their own income tax. This tax is abbreviated SIT on pay stubs, which stands for state income tax.
