How to Read a Pay Stub: Every Line Item Explained
Your pay stub has six sections: pay period dates, gross pay, pre-tax deductions, taxes withheld, post-tax deductions, and net pay. Learn what every line means, how to spot errors, and why your take-home is lower than your salary.
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How to read a pay stub starts with six sections: pay period dates, gross pay, pre-tax deductions, federal and state taxes withheld, post-tax deductions, and net pay. Every number on the stub flows from these six in order — gross pay is the ceiling, and each deduction layer reduces it until net pay remains.
How to read a pay stub
- Confirm the pay period dates — verify the start and end dates match the work period you are being paid for.
- Check gross pay — for hourly workers, this is hours × rate. For salaried workers, annual salary ÷ pay periods (26 for biweekly).
- Review pre-tax deductions — 401(k) contributions, health insurance premiums, FSA/HSA contributions. These reduce your taxable wages.
- Verify taxes withheld — federal income tax, state income tax, Social Security (6.2%), and Medicare (1.45%).
- Note post-tax deductions — Roth 401(k) contributions, supplemental life insurance, any wage garnishments.
- Confirm net pay — this should equal gross pay minus all deductions above. Cross-check it against your bank deposit.
The six sections in detail
1. Pay period information
The header section shows your pay period start and end dates, your pay date, and your employer identification number. Check the dates on every stub — processing errors occasionally pay the wrong period or duplicate a period entirely.
2. Gross pay
Gross pay is your total earnings before any deductions. It includes your regular wages, overtime, bonuses, commissions, and any taxable fringe benefits. For a $60,000/year salaried employee paid biweekly, gross pay per stub is $60,000 ÷ 26 = $2,307.69.
| Pay type | How it appears | Example |
|---|---|---|
| Regular wages | Regular or Salary | $2,307.69 |
| Overtime (1.5×) | OT or Overtime | $86.54/hour |
| Bonus | Bonus or Supplemental | $500.00 |
| Shift differential | Night Diff or Shift Prem | $0.75/hour extra |
3. Pre-tax deductions
Pre-tax deductions are subtracted from gross pay before taxes are calculated, reducing your taxable income. Common pre-tax deductions include traditional 401(k) contributions, health/dental/vision insurance premiums paid by the employee, Flexible Spending Account (FSA) contributions, and Health Savings Account (HSA) contributions. A $300/month 401(k) contribution on a $60,000 salary reduces your federal taxable income by $3,600/year — saving roughly $792 in federal tax at the 22% bracket.
4. Taxes withheld
This section shows the actual dollars withheld this pay period for each tax.
| Tax line | Rate | Notes |
|---|---|---|
| Federal income tax | Varies (W-4 driven) | Based on filing status and allowances |
| State income tax | 0–13.3% | Zero in TX, FL, WA, NV, AK, SD, WY, TN, NH |
| OASDI / Social Security | 6.2% | Capped at $176,100 wage base (2025) |
| Medicare | 1.45% | Additional 0.9% above $200k single |
| Local / city tax | Varies | NYC, Philadelphia, and other cities |
5. Post-tax deductions
Post-tax deductions are taken after taxes are applied and do not reduce your taxable income. Roth 401(k) contributions are the most common post-tax deduction — you pay tax now in exchange for tax-free withdrawals in retirement. Other post-tax items include supplemental life insurance, disability insurance, union dues, and court-ordered wage garnishments.
6. Net pay
Net pay is gross pay minus all pre-tax deductions, taxes, and post-tax deductions. This is the amount deposited in your bank account. If your direct deposit amount does not match this figure, contact payroll — the discrepancy is either an error or a split deposit you configured.
Year-to-date (YTD) columns
Most pay stubs include a YTD column alongside the current-period column. YTD accumulates every pay period from January 1. These columns are especially important for three reasons:
- Verify your W-2 in January. Your W-2 Box 1 (wages) should equal YTD gross pay minus YTD pre-tax deductions. If they do not match, request a corrected W-2C from your employer before filing.
- Track 401(k) contribution limits. The 2026 limit is $23,500 ($31,000 if 50+). Your YTD 401(k) line shows exactly how much you have contributed, so you can adjust if you are approaching the cap.
- Check Social Security wage base. OASDI stops being withheld once YTD wages exceed $176,100. High earners should verify this cutoff is applied correctly in the pay period it is reached.
Worked example: $55,000 salary, biweekly pay
Single filer, $55,000/year salary, contributing 6% to a traditional 401(k), paying $180/biweekly for health insurance, no state income tax (Texas).
| Line item | This period | YTD (after 10 periods) |
|---|---|---|
| Gross pay | $2,115.38 | $21,153.80 |
| 401(k) (6%) | −$126.92 | −$1,269.20 |
| Health insurance | −$180.00 | −$1,800.00 |
| Federal taxable wages | $1,808.46 | $18,084.60 |
| Federal income tax | −$196.00 | −$1,960.00 |
| Social Security (6.2%) | −$131.15 | −$1,311.50 |
| Medicare (1.45%) | −$30.67 | −$306.70 |
| Net pay | $1,450.62 | $14,506.20 |
Net pay ($1,450.62) is 68.6% of gross pay ($2,115.38). The remaining 31.4% went to pre-tax deductions (14.5%) and taxes (16.9%).
Common errors to catch
- Wrong hours. If you track your own hours, compare the stub hours to your records. Rounding errors and missed overtime happen more often than most employees realise.
- Old pay rate after a raise. Employers sometimes forget to update payroll. If you received a raise, verify the first stub after the effective date uses the new rate.
- 401(k) contributions not starting. After enrolling, confirm the first post-enrollment stub shows the deduction. Enrollment paperwork occasionally falls through the cracks.
- Missing shift differentials. Night, weekend, and hazard pay differentials are sometimes omitted when payroll is processed manually.
- W-4 changes not applied. After updating your W-4 (following a life event like marriage or a new dependent), verify the first subsequent stub reflects the new withholding.
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Authoritative sources
- U.S. Department of Labor — Pay Stub Requirements — Federal requirements for what pay records must show under the Fair Labor Standards Act, including hours worked, rates of pay, and deductions.
- IRS Publication 15 (Circular E) — Employer's Tax Guide — The authoritative IRS guide on income tax withholding, Social Security, and Medicare tax rates, wage bases, and withholding methods.
Key takeaways
- Your pay stub has six sections in order: pay period dates, gross pay, pre-tax deductions, taxes withheld, post-tax deductions, and net pay. Net pay is the result of subtracting all five categories from gross pay.
- Pre-tax deductions — 401(k), health insurance, FSA/HSA — reduce your taxable income before taxes are applied. A $300/month traditional 401(k) contribution saves roughly $66/month in federal tax at the 22% bracket.
- OASDI (Social Security) is 6.2% of gross wages up to $176,100 in 2025. Medicare is 1.45% with no cap. These are withheld separately from income tax and appear as their own lines on your stub.
- Check your YTD columns against your W-2 in January. Your W-2 Box 1 wages should equal YTD gross minus YTD pre-tax deductions. Any mismatch needs a corrected W-2C before filing.
- Read your stub every pay period — errors happen and they compound over time. Wrong hours, missed raises, and 401(k) enrollment failures are among the most common issues that go undetected for months.
- Once you understand the deduction layers, the gap between gross and net pay becomes predictable. Use that predictability to budget accurately from your actual take-home, not your stated salary.
Frequently asked questions
Why does my pay stub show a different amount than my salary?
Your salary is your gross annual pay — the number before any deductions. Your pay stub shows net pay: what remains after federal income tax, state income tax, Social Security (6.2%), Medicare (1.45%), health insurance, 401(k) contributions, and any other deductions are removed. For a $60,000 salary, net take-home is typically $42,000–$48,000 per year depending on your elections, state, and filing status.
What does YTD mean on a pay stub?
YTD means year-to-date — the cumulative total from January 1 through the current pay period. Each line typically shows both the current period amount and the running YTD total. YTD figures matter most at year-end: your W-2 Box 1 wages should match your YTD gross minus your YTD pre-tax deductions.
What is OASDI on a pay stub?
OASDI stands for Old-Age, Survivors, and Disability Insurance — the formal name for Social Security. You contribute 6.2% of gross wages up to the 2025 wage base of $176,100. Your employer matches that 6.2% but it does not appear on your pay stub. Medicare (1.45%) is a separate deduction and has no income cap.
Can my employer make mistakes on my pay stub?
Yes, and it happens more often than most employees check for. Common errors include incorrect hours logged, the wrong pay rate after a raise takes effect, missed shift differentials, and incorrect withholding after a W-4 change. Compare your gross pay calculation manually. If anything is off, report it in writing so there is a record of when you flagged it.
Why does my federal withholding change from paycheck to paycheck?
Federal income tax withholding is recalculated each pay period based on that period's gross wages. If your pay varies — overtime, bonuses, commission — the withholding amount fluctuates accordingly. A supplemental payment like a bonus is often withheld at a flat 22% rate regardless of your actual bracket, which can make that particular paycheck look unusually thin.
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