PAY GUIDE
6 min read · July 26, 2026
How to Read a Pay Stub — Every Line Explained
Most people look at one number on their pay stub — the amount that hits their bank account — and ignore everything else. But every line on that stub is money either earned by you or taken from you, and understanding it is the difference between catching a costly error and paying for someone else's mistake for months. Here is every section of a US pay stub, explained in plain English.
Gross Pay — The Starting Number
Gross pay is everything you earned in the pay period before any deductions: base wages or salary, overtime, bonuses, commissions and tips. If you are hourly, check this line first every payday — multiply your rate by your hours and confirm it matches. Payroll errors on hours worked are the most common pay stub mistake, and they are almost always in the employer's favour.
Federal Income Tax Withholding
This is an estimate of your federal tax bill, withheld each paycheck and sent to the IRS on your behalf. The amount is driven by what you entered on your W-4 form — filing status, dependents, and any extra withholding you requested. It is not a fixed percentage. If your refund is huge every year, you are withholding too much and giving the government an interest-free loan. If you owe every April, you are withholding too little.
FICA — Social Security and Medicare
These two lines appear on every paycheck and there is no avoiding them. Social Security takes 6.2% of your gross pay up to the annual wage base limit. Medicare takes 1.45% with no cap, plus an extra 0.9% on income over $200,000. Together that is 7.65% of your pay — and note that these payroll taxes still apply to overtime and tips even under the new federal deductions.
State and Local Taxes
Depending on where you live, you may see state income tax, city or county tax, and state-specific lines like disability insurance. Nine states have no state income tax at all — if you live in Texas, Florida, Nevada, Washington, Wyoming, South Dakota, North Dakota, Alaska, Tennessee or New Hampshire, this line should be empty or absent. Check your exact state breakdown with our state paycheck calculators.
Pre-Tax and Post-Tax Deductions
Pre-tax deductions come out before tax is calculated, which lowers your taxable income — 401(k) contributions, traditional health insurance premiums, HSA and FSA contributions. Post-tax deductions come out after — Roth 401(k), some insurance types, wage garnishments, union dues. The order matters: $100 into a pre-tax 401(k) costs you less than $100 of take-home pay, because it reduces your tax bill at the same time.
The YTD Columns
Year-to-date columns show running totals for the calendar year — total earned, total tax withheld, total deducted. These are worth a glance every payday: if a deduction you cancelled months ago is still accumulating in YTD, you have found money your employer owes you.
Overtime and the New Box 12 Code TT
If you work overtime, your stub should show overtime hours and the premium rate separately from regular pay. This matters more than ever: under the no tax on overtime deduction, you can deduct up to $12,500 in qualified overtime compensation from your federal taxable income ($25,000 filing jointly) for tax years 2025 through 2028. For 2025 many employers did not separate it out, meaning you need your pay stubs to calculate it yourself. From 2026, employers must report qualified overtime in W-2 Box 12 under code TT. Read our full guide on the no tax on overtime deduction for how to claim it.
How to Spot Pay Stub Errors
Check three things every payday: hours and rate match reality, your filing status has not mysteriously changed, and cancelled deductions have actually stopped. If something is wrong, raise it with payroll in writing immediately — errors compound every pay period until someone catches them.