GUIDE
7 min read · July 20, 2026
How to Read a Pay Stub — A Complete Line-by-Line Guide
Most workers glance at the bottom line — net pay — and move on. But every number between your salary and your take-home pay represents a real dollar going somewhere specific: the federal government, your state, Social Security, Medicare, or your own retirement fund. Once you know what each line means, your pay stub stops being confusing and starts being useful.
What a Pay Stub Actually Shows
A pay stub is a record your employer provides with every paycheck. It documents exactly what you earned during that pay period, what was withheld, and how those numbers add up cumulatively over the year. Pay stubs are issued per pay period — weekly, bi-weekly, semi-monthly, or monthly — and each one follows roughly the same structure regardless of your employer or state.
The most important concept to understand first: gross pay and net pay are not the same thing. Gross pay is the number your salary or hourly rate implies — the full amount your employer agrees to pay you. Net pay is what you actually receive after every deduction has been taken. For most workers, the gap between those two numbers is 25–35% of gross pay.
Line-by-Line Breakdown of a Pay Stub
Here is every major section you will see on a typical pay stub and what each line means:
| Line Item |
What It Means |
| Regular Earnings |
Your base pay for hours worked at your standard rate. Salaried employees see a fixed amount; hourly workers see hours × rate. |
| Overtime Earnings |
Hours worked beyond 40/week at 1.5× your regular rate. Some states use daily overtime thresholds instead. |
| Bonus / Commission |
Variable pay. These are still taxable earnings — your employer withholds taxes on them too, often at the supplemental rate of 22% for federal. |
| Gross Pay |
The total of all earnings lines before anything is deducted. This is the number your salary is quoted in. |
| Federal Income Tax (FIT) |
Withheld based on the IRS tax tables plus your W-4 instructions. The amount changes as your income bracket changes throughout the year. |
| State Income Tax (SIT) |
Withheld based on your state's tax rates and your state withholding form. Nine states — including Texas and Florida — have no income tax, so this line will be $0 for those residents. |
| Social Security (OASDI) |
6.2% of gross pay, up to the annual wage base ($176,100 in 2026). Once your YTD earnings exceed that cap, Social Security withholding stops for the rest of the year. |
| Medicare (HI) |
1.45% of all gross wages — no cap. Earners above $200,000 ($250,000 married filing jointly) pay an extra 0.9% Additional Medicare Tax. |
| 401(k) / 403(b) |
Your pre-tax retirement contribution. Reduces your taxable gross pay before federal and most state income taxes are calculated. Does not reduce FICA taxes. |
| Health / Dental / Vision |
Usually pre-tax (under a Section 125 cafeteria plan). Reduces both your income tax base and your FICA base — a real savings on every paycheck. |
| HSA / FSA |
Pre-tax contributions to Health Savings Accounts or Flexible Spending Accounts. Fully exempt from federal income tax, Social Security, and Medicare. |
| Post-tax Deductions |
Items like Roth 401(k) contributions, life insurance above $50k face value, or wage garnishments. These come out after tax is calculated and do not reduce your taxable income. |
| Net Pay |
Gross pay minus all taxes and deductions. This is the amount deposited into your bank account or written on your check. |
| YTD Columns |
Running totals for every line since January 1. Useful for tax planning and catching withholding errors early in the year rather than at tax time. |
Why Your Take-Home Pay Is Lower Than Your Salary
A $65,000 salary sounds like $5,417 per month. But a single worker in a moderate-tax state, contributing 5% to a 401(k) and paying average health insurance premiums, will typically take home $3,700–$4,000 per month. That is a difference of $1,400–$1,700 — and it does not mean anything has gone wrong. Here is a realistic breakdown of where a typical paycheck goes:
Pre-tax deductions like a 401(k) or health insurance lower the taxable income figure, so they reduce your federal and state tax withheld — but they also directly reduce your net pay. The tax savings partially offset the contribution, which is why pre-tax accounts are more efficient than post-tax savings for most earners.
The Difference Between Pre-Tax and Post-Tax Deductions
This distinction matters more than most workers realise. A pre-tax deduction comes out of your gross pay before income taxes are calculated. A $200/month health insurance premium taken pre-tax saves you roughly $40–$60 in income tax on top of the premium itself. A post-tax deduction (like a Roth 401(k) contribution) comes out after taxes have already been calculated — you pay tax now, but the growth and withdrawals in retirement are tax-free.
Common pre-tax deductions: traditional 401(k)/403(b), health/dental/vision premiums (under a Section 125 plan), HSA contributions, FSA contributions, commuter benefits.
Common post-tax deductions: Roth 401(k), after-tax life insurance premiums above the employer-paid $50k threshold, wage garnishments, union dues (in some cases), charitable payroll deductions.
Pay Stubs Vary by State
The federal lines on your pay stub look the same no matter where you work — FIT, Social Security, Medicare are universal. But state income tax withholding is different everywhere, and it has a significant effect on your net pay.
Nine states have no individual income tax: Alaska, Florida, Nevada, New Hampshire (on wages), South Dakota, Tennessee (on wages), Texas, Washington, and Wyoming. Workers in those states see a $0 line for SIT and take home meaningfully more of each paycheck than workers in high-tax states at the same gross pay.
At the other end, states like California, New York, New Jersey, and Oregon have graduated income tax rates that can exceed 10% for higher earners. A $90,000 earner in California pays roughly $5,000 more in state income tax per year than the same earner in Texas.
See how state tax differences play out for your actual paycheck:
Or browse all 50 state paycheck calculators to find your exact state.
Common Pay Stub Mistakes and Red Flags to Check
Pay stubs contain errors more often than most workers expect. Payroll software can be misconfigured, manual entry mistakes happen, and benefit elections sometimes do not load correctly at the start of a new plan year. Here are the most common issues worth checking:
- Wrong filing status or allowances. If you got married, had a child, or started a second job and did not file an updated W-4, your withholding may be too high or too low. Compare your current withholding to an IRS withholding estimator calculation.
- Missing pre-tax deduction. If you enrolled in a 401(k) or HSA during open enrollment but do not see the deduction on your pay stub, contact payroll immediately. Missed contributions are hard to make up later in the year and you may lose employer match.
- Social Security still being withheld after hitting the wage base. In 2026 the wage base is $176,100. If your YTD earnings have crossed that threshold but Social Security is still being deducted, flag it — employers are required to stop withholding once you hit the cap.
- Overtime calculated at the wrong rate. Federal law requires 1.5× your regular rate of pay — not 1.5× your base hourly rate if you receive non-discretionary bonuses or shift differentials. Those must be factored into the regular rate calculation.
- Wrong state tax being withheld. If you work remotely in a different state from your employer's headquarters, you should be taxed in your state of residence (in most cases), not your employer's state. Incorrect state withholding is one of the most common remote-work payroll errors.
- YTD totals not matching expectations. Add up your gross pay across all stubs for the year and compare it to your YTD total. If there is a discrepancy, there may be a missed payroll or an uncorrected payroll error somewhere in the year.
What to Do If Something Looks Wrong
Start with your HR or payroll department. Bring the specific pay stub, the line item in question, and a written explanation of what you believe is incorrect. Payroll teams deal with corrections regularly and can usually identify the issue quickly with the right information.
For tax withholding questions (W-4 adjustments, whether you are overwithholding or underwithholding), the IRS Tax Withholding Estimator is a reliable free tool. For understanding your exact net pay after all deductions in your state, a paycheck calculator is the fastest way to model different scenarios before you make changes.