How to Read Your Pay Stub: Every Line Explained
Gross pay, FICA, withholding, pre-tax deductions and net pay. What each line on a US pay stub means and how to check the numbers are right.
Most people glance at the last number on their pay stub and move on. That is a mistake. Pay stubs contain errors more often than you would think, and the only person who will catch them is you. This guide walks through a typical US pay stub line by line.
Gross pay
Gross pay is what you earned before anything was taken out. For salaried employees it is your yearly salary divided by the number of pay periods. Someone earning $75,000 a year and paid twice a month has a gross pay of $3,125 per check.
For hourly workers it is hours multiplied by your rate, plus overtime at 1.5 times your rate for hours over 40 in a week. Check the hours. Missing overtime is the most common pay stub error.
Pre-tax deductions
These come out before taxes are calculated, which is why they are valuable. Typical lines:
- 401(k) or 403(b) contributions. Your retirement savings. The percentage you chose, applied to gross pay.
- Health, dental and vision premiums. Your share of the insurance cost.
- HSA or FSA contributions. Money set aside for medical expenses.
- Commuter benefits. Transit passes or parking.
Gross pay minus pre-tax deductions gives your taxable wages, and that is the number the next section is based on.
Taxes
Federal income tax
Your employer withholds an estimate of the federal income tax you will owe, based on the W-4 form you filled out when you were hired. Withholding is a guess. If too much is withheld you get a refund in April; if too little, you owe. If your refund is always large, you can lower your withholding by updating your W-4.
Social Security and Medicare (FICA)
These two are fixed percentages and there is no guessing involved:
| Tax | Employee rate | Notes |
|---|---|---|
| Social Security | 6.2% | Stops once your yearly wages pass the annual cap |
| Medicare | 1.45% | No cap; an extra 0.9% applies above $200,000 |
Your employer pays the same amounts on top, which is why self-employed people pay both halves.
State and local taxes
Depends entirely on where you live and work. Nine states have no income tax on wages. Some cities, like New York City and Philadelphia, add their own. If you moved during the year, check that the state on your stub changed with you.
Post-tax deductions
Taken out after taxes. Roth 401(k) contributions, union dues, life insurance above the employer-paid amount, wage garnishments and charitable payroll giving all land here.
Net pay
Gross pay minus everything above. This is what hits your bank account. A quick sanity check: for most salaried workers net pay is somewhere between 65% and 80% of gross. If yours is far outside that range, go line by line and find out why.
Year-to-date columns
Next to each line you will usually see a year-to-date (YTD) total. Two things to check here:
- Social Security stops at the cap. If your YTD wages are above the cap and Social Security is still being withheld, your employer owes you a refund.
- 401(k) limit. If your YTD contributions approach the yearly IRS limit, make sure payroll stops them. Going over creates a paperwork headache.
Three mistakes worth looking for
- Wrong filing status or allowances carried over from an old W-4, which makes withholding too high or too low all year.
- Missing or miscalculated overtime, especially around holidays and shift changes.
- Benefit deductions that did not stop after you cancelled a plan.
If you find one, email payroll with the pay date, the line, and the number you expected. Corrections are routine, but only if you ask.