Guide
How to Read Your Pay Stub
Most people look at exactly one number on their pay stub: the deposit. But the dozen lines above it explain where a third of your paycheck goes — and payroll mistakes are more common than you'd think. Five minutes with this guide and you'll read a stub like an accountant.
Gross pay: the number you were quoted
Gross pay is your salary or hourly earnings for the period before anything comes out. If you're salaried at $85,000 and paid every two weeks, that's $85,000 ÷ 26 = $3,269.23 per check. Everything below this line is a subtraction, and the order of those subtractions matters more than people realize.
Pre-tax deductions come out first
Traditional 401(k) or 403(b) contributions, most health, dental, and vision premiums, HSA and FSA contributions — these come out before income tax is calculated, which means they lower your tax bill. Put $200 into a traditional 401(k) and, if you're in the 22% bracket, your take-home only drops by about $156. The other $44 is tax you didn't pay. This is why retirement contributions hurt less than their sticker price, and it's the single most useful thing to understand on the whole stub.
Federal income tax withholding
This is an estimate of your annual federal tax, sliced into paychecks based on your Form W-4. It's not your actual tax bill — that gets settled when you file. Withhold too much all year and you get a refund, which sounds nice but means you gave the government an interest-free loan. Withhold too little and April brings an unpleasant surprise. If your refund or bill regularly tops a couple thousand dollars, updating your W-4 is a ten-minute fix.
FICA: Social Security and Medicare
Two lines, fixed rates, no W-4 involved. Social Security takes 6.2% of wages up to an annual cap ($184,500 in 2026 — high earners will notice this line disappear late in the year once they hit it). Medicare takes 1.45% of everything, plus an extra 0.9% on wages above $200,000. Your employer quietly pays a matching share of both, which is part of why hiring you costs more than your salary.
State and local taxes
Depending on where you live and work, you may see state income tax, city or county tax, and state-run programs like disability insurance or paid family leave. Nine states have no income tax at all; a few cities, like New York and Philadelphia, take their own cut. If you moved or started working remotely across state lines this year, this section deserves a close look — multi-state withholding errors are one of the most common payroll mistakes.
Post-tax deductions and the finish line
After taxes come Roth 401(k) contributions, some insurance products, union dues, garnishments, and anything else that doesn't get pre-tax treatment. What's left is net pay — the deposit. On a typical stub, net pay lands between 65% and 80% of gross, depending on your tax situation and benefit elections.
Three things worth checking every payday
First, your pay rate and hours — especially after a raise, promotion, or overtime-heavy period, because raises are mis-keyed more often than payroll departments would like to admit. Second, your 401(k) line, confirming the percentage matches what you elected and that any employer match is landing. Third, the year-to-date columns, which quietly reveal problems a single paycheck hides: a bonus taxed strangely, a benefit that stopped deducting, a Social Security line that should have capped but didn't. Ten seconds per item, and you'll catch in February what most people discover at tax time.