How to Read Your Pay Stub — Every Line Explained

Your pay stub is a detailed record of where your money goes every pay period. Most people glance at the net pay (the number that hits their bank account) and ignore everything else — which is a mistake. Understanding every line helps you catch errors, optimize your withholding, make better benefits decisions, and understand why your take-home is what it is.

This guide walks through every section of a typical US pay stub, what each line means, and what you can do about it.

Pay Period vs. Year-to-Date (YTD)

Most pay stubs show two columns: the current pay period and year-to-date totals. The YTD column is especially useful for tracking when caps kick in (like Social Security) and ensuring your annual withholding adds up correctly.

Common pay period types:

• Biweekly (26 periods/year) — Most common. You get 2 "bonus" paychecks in 2 months per year.
• Semi-monthly (24 periods/year) — 1st and 15th, or 15th and last day of month.
• Monthly (12 periods/year) — Common for some salaried roles and academia.
• Weekly (52 periods/year) — Common in hourly jobs.

Gross Pay

Gross pay is your total earnings before any deductions. For salaried employees, it's simply your annual salary divided by the number of pay periods. For hourly workers, it's hours worked × hourly rate, plus any overtime.

If you received a raise, bonus, or commission in this period, it should appear here. Always verify gross pay matches what you're owed — payroll errors happen more than you'd expect.

Federal Income Tax Withheld

This is based on your W-4 form and the IRS tax tables. The W-4 was redesigned in 2020 — if you haven't updated yours since then, your withholding may be off.

Under-withholding means you'll owe taxes in April (plus possible penalties). Over-withholding means you're giving the IRS an interest-free loan all year and getting a refund in spring. Neither is ideal.

You can adjust your W-4 at any time by submitting a new one to HR. Use the IRS Tax Withholding Estimator tool if you're unsure how to fill it out correctly. Common reasons to update your W-4:

• Got married or divorced
• Had a child (adds dependent credit)
• Got a significant raise or second income
• Started a side business with self-employment income

Social Security Tax (6.2%)

This funds Social Security retirement and disability benefits. The rate is always 6.2% for employees, and it only applies to the first $176,100 of wages in 2026 (this cap, called the wage base, increases slightly each year).

Once your YTD earnings hit the wage base mid-year, this deduction disappears for the rest of the year — which is why some workers notice a "raise" in their October or November paycheck. Your employer also pays 6.2% on your behalf, invisibly.

Medicare Tax (1.45%)

Unlike Social Security, Medicare tax has no cap — it applies to all wages at 1.45%. High earners above $200,000 (single) or $250,000 (married filing jointly) pay an additional 0.9% Additional Medicare Tax, for a total of 2.35% above those thresholds. Your employer doesn't match this additional 0.9%.

State Income Tax

Depends entirely on where you work and live. Nine states have no income tax at all: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. If you live in one of these, this line won't appear.

For everyone else, the amount withheld is based on your state's withholding form (equivalent of the federal W-4). Some states use your federal W-4 directly; others have their own form. If you moved to a new state during the year, check that your employer updated the withholding correctly — it's a common source of errors.

See how much you'd save in a no-tax state, or use the calculator to see your state-specific breakdown.

Pre-Tax Deductions (the ones that actually help you)

Pre-tax deductions reduce your taxable income before taxes are calculated — meaning you save both federal and (usually) state income tax on every dollar you contribute. These are among the most powerful tools available to employees:

Post-Tax Deductions

These come out after taxes are calculated, so they don't reduce your taxable income:

• Roth 401(k) — Contributions are post-tax, but growth and qualified withdrawals are tax-free. Better if you expect to be in a higher tax bracket in retirement.
• Life insurance above $50,000 — Employer-paid group life insurance above $50k in coverage is a taxable benefit (you'll see "Imputed Income" on your stub).
• Wage garnishments — Child support, student loan garnishments, or court-ordered deductions.
• Union dues — If applicable.

Net Pay

Net pay is what actually lands in your bank account after all deductions. This is your real take-home pay — and it's usually substantially lower than your gross salary.

To understand exactly how your annual salary translates to hourly take-home pay (accounting for all taxes by state), use the salary to hourly calculator.

Common Pay Stub Errors to Watch For

Payroll departments process thousands of transactions. Errors happen. Review your pay stub every few months — especially after:

• A raise or promotion — New gross pay should reflect starting the following pay period
• Moving to a new state — State withholding should update; if it doesn't, you'll owe taxes in both states
• Open enrollment changes — Health insurance and benefit deductions should update in January
• New 401k contribution election — Verify the percentage applied is what you selected
• Hitting the Social Security wage base mid-year — That deduction should stop; if it doesn't, you'll get a credit at tax time but it signals a payroll issue