How to Read Your Pay Stub: Every Line Explained
Most people glance at their pay stub long enough to confirm the deposit amount — then move on. But your pay stub contains a detailed accounting of exactly where your money went. Understanding it takes five minutes and can save you from tax surprises all year long.
What a pay stub is
A pay stub (also called a pay slip, paycheck stub, or earnings statement) is a document from your employer that details your earnings and deductions for a specific pay period. In the US, employers are generally required to provide this information to employees, either as a paper stub attached to a physical check or as a digital document through a payroll portal like ADP, Gusto, or Workday.
Pay stubs typically cover two time frames simultaneously: the current pay period (this paycheck) and year-to-date (YTD) totals (everything accumulated since January 1st). Both columns matter — the current period tells you what happened this paycheck, and the YTD column helps you spot problems and project your annual tax situation.
The earnings section
Gross Pay
Gross pay is your total earnings before any deductions. For salaried employees, this is your annual salary divided by the number of pay periods (26 for bi-weekly, 24 for semi-monthly, 12 for monthly). For hourly employees, it is your hours worked multiplied by your hourly rate, plus any overtime.
Example: A $78,000/year salary paid bi-weekly produces a gross pay of $78,000 ÷ 26 = $3,000.00 per paycheck.
Regular Pay, Overtime, Bonus
Many pay stubs break gross pay into components. Regular pay is your base earnings. Overtime is hours worked beyond 40 per week, typically paid at 1.5× your regular rate. Bonus or supplemental pay may appear as a separate line — bonuses are still subject to all taxes, but employers can use either the flat 22% supplemental rate or the aggregate method for withholding.
Hours Worked
Hourly employees will see hours worked listed. Salaried employees may see a note that salary is not based on hours, or a nominal hours figure. This section also often shows vacation and sick leave balances, accruals, and usage.
The tax deductions section
This is the largest section on most pay stubs and the one most people skip. It lists every tax withheld from your paycheck, usually grouped into federal, FICA, and state/local categories.
Federal Income Tax (FIT)
This is the amount withheld for your federal income tax liability. The amount is determined by your gross pay, pay frequency, and the elections you made on your W-4 form — specifically your filing status and any additional withholding you requested. This is not a flat percentage; it is calculated using IRS withholding tables that approximate the progressive bracket system.
If the FIT line looks unexpectedly high or low, check whether your W-4 is up to date. Life events like marriage, divorce, a new child, or a side job should trigger a W-4 update.
Social Security Tax (OASDI)
Social Security tax is always 6.2% of your gross wages, up to the annual wage base. In 2026, that cap is $184,500. Once your YTD earnings exceed $184,500, Social Security withholding stops for the rest of the year. If you earn above that threshold, you’ll notice your paychecks get slightly larger after the cap is hit.
Medicare Tax (Med)
Medicare tax is 1.45% of all wages — there is no cap. High earners (above $200,000 for single filers; $250,000 for married filing jointly) also pay an additional 0.9% Additional Medicare Tax. Employers are required to withhold the extra 0.9% once your wages from that employer exceed $200,000 in a year, even if your combined household income is below the threshold.
State Income Tax (SIT)
If you live in a state with an income tax, you’ll see a state income tax line. Nine states — Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming — have no state income tax, so residents there won’t see this line (or it will show $0.00).
Some states require a state-specific withholding form similar to the W-4. Others use your federal W-4 elections as the basis for withholding.
Local / City Tax
Some cities and counties levy their own income tax. New York City, Philadelphia, Columbus, and Portland (Oregon) are examples. If you work or live in one of these jurisdictions, you’ll see a separate local tax line.
Pre-tax and post-tax deductions
Pre-Tax Deductions
Pre-tax deductions come out of your gross pay before income taxes are calculated. This lowers the amount of income you’re taxed on, which saves you money. Common pre-tax deductions include:
- Traditional 401(k) / 403(b) contributions — reduces federal and state taxable income, but not FICA
- Health insurance premiums — if offered through an employer Section 125 plan, reduces federal income tax and FICA
- HSA contributions (Health Savings Account) — reduces federal income tax and FICA
- FSA contributions (Flexible Spending Account) — reduces federal income tax and FICA
- Dependent Care FSA — reduces federal income tax and FICA
Post-Tax Deductions
Post-tax deductions come out of your pay after taxes have been calculated and do not reduce your taxable income. Examples include:
- Roth 401(k) contributions — no current tax benefit, but withdrawals in retirement are tax-free
- Life insurance premiums (if above the employer-provided $50,000 limit)
- Wage garnishments — court-ordered deductions for child support, student loans, or debt
- Charity contributions — some employers allow direct payroll giving
- Union dues
Net pay and year-to-date totals
Net Pay
Net pay — also called take-home pay — is the amount that actually lands in your bank account. It equals gross pay minus all taxes and deductions. This is the number you should be using for budgeting, not gross pay.
Formula: Net Pay = Gross Pay − Federal Tax − FICA (SS + Medicare) − State Tax − Local Tax − All Deductions
Year-to-Date (YTD) Totals
The YTD column is extremely useful for projecting your tax situation. By looking at your YTD federal income tax withheld and comparing it to your expected annual tax liability, you can tell whether you’re on track for a refund, a balance due, or a roughly breakeven situation.
The YTD Social Security earnings line is also important — once it approaches $184,500 (the 2026 wage base), you know your Social Security withholding will stop, effectively giving you a raise in your net pay.
Pro tip: Check your pay stub against the calculator
Enter your gross pay, deductions, and state into our free paycheck calculator and compare the results to your actual pay stub. If the numbers are significantly different, it usually means your W-4 elections are set differently from the calculator’s assumptions — or it can reveal an error in your payroll.