How to Read Your Pay Stub: Every Line Explained (2026)

Quick answer

A pay stub is a document your employer provides each pay period showing exactly how your gross pay becomes your take-home pay. Every pay stub has four main sections:

1. Gross pay: total earnings before any deductions
2. Taxes: federal, state, and FICA withholdings
3. Deductions: pre-tax (401k, health insurance) and post-tax (Roth 401k, garnishments)
4. Net pay: what actually hits your bank account

Understanding each line helps you verify your pay is correct, plan your tax return, and spot errors before they compound.

The anatomy of a US pay stub

A typical US pay stub is organized into sections. Here’s what each one is for.

Header

• Employer information: company name, address, EIN
• Employee information: your name, address, employee ID
• Pay period: the date range this paycheck covers (e.g., “Jan 1 - Jan 15”)
• Pay date: the date this pay hits your bank
• Check or deposit number: a reference ID

Earnings section

Shows what you earned, broken down by type. Common line items:

• Regular pay: hours × hourly rate, or the prorated salary for this period
• Overtime pay: overtime hours × (hourly rate × 1.5 typically)
• Holiday / PTO: paid time off used this period
• Bonus: one-time payments
• Commission: if applicable
• Gross pay: sum of all earnings

You’ll see two columns for most lines: Current (this paycheck) and Year-to-date (YTD) (total for the calendar year so far).

Taxes section

Mandatory tax withholdings. These are taken out before you ever see the money.

• Federal Income Tax: varies by your W-4 and income level. This isn’t a flat rate; it’s calculated using federal tax brackets. Over-withholding creates a refund at tax time. Under-withholding creates a tax bill.
• State Income Tax: depends on your state. Some states (AK, FL, NV, NH, SD, TN, TX, WA, WY) have no state income tax.
• Local tax: city, county, or school district tax in some places (e.g., NYC, Philadelphia, certain Ohio cities).
• Social Security (OASDI): 6.2% of gross pay, capped at the first $176,100 of earnings in 2025. Your employer also pays 6.2%.
• Medicare: 1.45% of gross pay. Plus 0.9% additional on wages over $200,000 (single) or $250,000 (MFJ).

Together, Social Security and Medicare are called FICA (Federal Insurance Contributions Act) taxes. Total employee FICA is 7.65% of most wages.

Pre-tax deductions

These come out of your gross pay before federal and state taxes are calculated. They reduce your taxable income.

• Traditional 401(k) contribution: pre-tax retirement savings
• Health insurance premium: your portion of the company plan
• Dental insurance
• Vision insurance
• HSA contribution (Health Savings Account, if you have a high-deductible plan)
• FSA contribution (Flexible Spending Account, for medical or dependent care)
• Commuter / transit benefits
• Disability insurance (some plans)

Because these come out pre-tax, they reduce your federal and state income tax for the year. FICA (Social Security + Medicare) still applies to most of them, except health insurance premiums which are also FICA-exempt.

Post-tax deductions

Taken out of your pay after taxes. They don’t reduce your taxable income.

• Roth 401(k) contribution: after-tax retirement savings that grows tax-free
• Roth IRA (if deducted via payroll)
• Life insurance (over a certain amount)
• Long-term disability (sometimes)
• Wage garnishments: court-ordered (child support, student loan default, tax levy)
• Charitable deductions
• Union dues

Net pay

The final line. This is what lands in your bank account.

Net Pay = Gross Pay − Pre-tax Deductions − Taxes − Post-tax Deductions

Leave balances

Many pay stubs also show:

• PTO accrued and available
• Sick leave balance
• Vacation balance

Tracked so you know how much paid time off you’ve earned and used.

Example pay stub breakdown

$75,000 annual salary, paid bi-weekly, single, California, 5% 401k, $100/paycheck health insurance:

Net pay is about 68.5% of gross pay in this scenario.

Common pay stub abbreviations

• YTD: Year to Date
• OASDI: Old-Age, Survivors, and Disability Insurance (Social Security)
• FICA: Federal Insurance Contributions Act (SS + Medicare)
• FWT: Federal Withholding Tax (federal income tax)
• SWT: State Withholding Tax
• FICA EE: Employee FICA portion
• FICA ER: Employer FICA portion (informational, not deducted from you)
• FUTA: Federal Unemployment Tax (employer only)
• SUTA/SUI: State Unemployment Tax
• HSA / FSA: Health / Flexible Spending Account
• LTD / STD: Long / Short Term Disability
• GTL: Group Term Life Insurance
• BRV: Bereavement
• PTO: Paid Time Off
• HOL: Holiday Pay
• REG: Regular (base) pay
• OT: Overtime
• PH: Personal Holiday
• FLSA: Fair Labor Standards Act (overtime rules)
• W/H: Withholding
• SDI: State Disability Insurance (CA, NJ, RI, NY, Hawaii, PR)

How to spot errors

Check these numbers every paycheck:

• Hours worked: Match your time records.
• Pay rate: Matches your offer letter or most recent raise.
• 401(k) percentage: Matches what you elected.
• Health insurance deduction: Should be the same every pay period.
• State tax: Should be consistent for your state.
• Social Security wages (YTD): Should not exceed the annual cap ($176,100 in 2025; higher in 2026).

If anything is off, email your HR or payroll contact same-day. The longer you wait, the harder it is to fix.

Pay stub vs W-2

Your pay stub shows a single pay period. Your W-2 (Wage and Tax Statement) summarizes the entire calendar year for tax filing purposes.

Your final pay stub of the year should have YTD numbers that closely match your W-2. Small differences (usually related to pre-tax deductions reported differently) are normal. Large differences are a red flag to check with payroll.

How often should you review your pay stub?

• Every paycheck: Glance at gross, net, and anything unusual.
• After any benefits change: Open enrollment, new 401k election, insurance change.
• After a raise: Confirm new salary is correctly reflected.
• In January: Compare YTD totals to expected earnings.
• Before tax filing: Confirm W-2 matches final pay stub.

FAQ

Why is my federal tax different from a percentage of my income?

Federal income tax uses progressive brackets, not a flat rate. Your withholding also depends on how you filled out your W-4 and whether you have multiple jobs, dependents, or other income.

Why is my state tax so different from my friend’s?

State tax rates vary massively. California’s top rate is 13.3%; Texas has none. Even within a state, local taxes (city, county, school district) can shift your total.

What’s the difference between pre-tax and post-tax 401(k)?

Pre-tax (traditional) reduces your taxable income now; you pay tax in retirement. Post-tax (Roth) doesn’t reduce your taxable income now, but you pay no tax on growth or withdrawals in retirement.

What does “gross-up” mean on a pay stub?

A gross-up is when your employer adds extra pay to cover the taxes on a benefit (like a relocation bonus or company car). It’s a way to make the net benefit equal to a target number.

Why do I have different deductions this paycheck vs last?

Usually: you hit a YTD cap (like Social Security), your 401k contribution rate changed, or a benefit enrollment ended. Check your YTD totals and benefits portal.

Is my health insurance premium the company’s full cost?

No. Most companies pay 60% to 90% of the premium. Your deduction is only your portion. You can ask HR for the total cost (employer + employee) if you want to know the full value of the benefit.

What if my pay stub is wrong?

Report it to HR/payroll immediately. Keep a copy of the incorrect stub and any correspondence. Payroll errors are almost always fixed, but faster reporting = faster fix.

Bottom line

Your pay stub is the single best document for understanding where your money goes before it hits your bank. Every line represents a choice (or a legal obligation). Knowing what each line is lets you optimize the choices that are yours: 401k contribution, HSA, pre-tax transit, Roth vs traditional.

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Next: use our paycheck calculator to estimate take-home pay for any gross salary, state, and deduction combination.