How to Read Your Pay Stub

Pull up your most recent pay stub. Lay it next to this guide. We’ll go line by line — what each abbreviation means, what gets deducted, and how to spot a payroll error before it costs you.

A pay stub is three sections stacked on top of each other: earnings, taxes, deductions. Everything else is metadata. Once you can read those three sections, you can verify any paycheck.

What’s at the top

The header carries identifying information. None of it affects your money, but you should know what to look for if HR asks you to confirm your records.

• Employee ID — internal payroll number
• Pay period — start and end dates the wages cover
• Pay date — when the deposit hits your account
• YTD — year-to-date totals running alongside this period’s amounts

Check the pay period dates. Payroll errors hide here more often than anywhere else. A two-day overlap between periods usually means a missed shift or a duplicate.

Earnings: what you actually made

This section shows everything your employer paid you before any deductions. Common line items:

Multiply hours × rate for each line. They should add to your gross pay, the bolded total at the bottom of the earnings section.

If you’re salaried, you’ll see one earnings line — usually SALARY or REG — with no hours field. The amount should equal your annual salary divided by the number of pay periods (24 if semimonthly, 26 if biweekly).

Federal income tax withholding

This is the largest tax line for most workers. Look for FED, FIT, or FEDERAL TAX. The amount is determined by:

1. Your gross wages this period
2. Your filing status from your W-4 (Step 1)
3. Any extra withholding you requested (Step 4c)
4. Your pay frequency

Employers calculate it using IRS Publication 15-T tables. There’s no flat rate — federal withholding is progressive across your projected annual income. To verify the math, run your numbers through the paycheck calculator or the IRS withholding calculator.

A common mistake. Workers assume withholding equals their tax bill. It doesn’t. Withholding is a prepayment. The actual tax is settled when you file your return.

FICA: Social Security and Medicare

FICA stands for Federal Insurance Contributions Act. Two separate taxes, lumped together:

• Social Security (SS or OASDI): 6.2% of wages
• Medicare (MED or HI): 1.45% of wages
• Additional Medicare: extra 0.9% above $200,000 (single) or $250,000 (married filing jointly)

Together, the standard rate is 7.65% of your gross. Your employer matches it dollar for dollar — you just don’t see that on the stub.

Social Security tax stops once your year-to-date wages cross the 2026 wage base of $184,500. After that, your paychecks bump up because the 6.2% line goes to zero. Medicare keeps applying.

Worth checking: if you switched jobs mid-year and your combined wages exceed $184,500, both employers withheld Social Security tax up to the cap independently. Claim the excess as a credit on your federal return.

State and local tax

If you live in a state with income tax, you’ll see a STATE TAX or two-letter code (CA, NY, OH). The rate depends on:

• State withholding tables
• Your state filing status (separate from federal)
• Local taxes — some cities (NYC, Philadelphia, Detroit) tack on their own line

Nine states have no income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming. Live in one of those and the state tax line should be zero.

Pre-tax deductions

These come out of your gross pay before federal income tax is calculated. They lower your taxable wages.

• 401(k) / 403(b) / 457(b) — traditional retirement contributions (Roth versions are post-tax)
• HSA — health savings account, only available with a qualifying high-deductible plan
• FSA — flexible spending account, healthcare or dependent care
• Health / Dental / Vision — your share of insurance premiums
• Commuter / Transit — pre-tax transit benefits

Pre-tax deductions are powerful because they reduce three things at once: federal income tax, state income tax, and (for some, including HSA) Social Security tax base. Traditional 401(k) and FSA deductions still count toward the FICA wage base — they only shelter income from federal and most state taxes.

Post-tax deductions

These come out of your pay after taxes are calculated. They don’t reduce your taxable wages.

• Roth 401(k) — retirement contributions taxed now, tax-free later
• Garnishments — court-ordered withholding for child support, federal student loans, or unpaid taxes
• Union dues
• Charitable contributions through payroll
• Disability or life insurance premiums (when paid post-tax)

What’s new on 2026 pay stubs

Two new W-2 boxes flow through to the stub starting this year, courtesy of the One Big Beautiful Bill Act:

• Qualified tips — separately tracked tip income eligible for the new deduction (up to $25,000)
• Qualified overtime — the “half” portion of time-and-a-half wages, eligible for a deduction up to $12,500 single or $25,000 joint, with a phaseout starting at $150,000 MAGI single ($300,000 joint)

These don’t change your withholding right now. They flag the income for the deduction you’ll claim when filing your return. Work in a tipped occupation or earn overtime regularly? Check that your employer is reporting these correctly.

Net pay: what hits your account

Net pay equals gross pay minus every line above. It’s the dollar amount that lands in your bank account. If your direct deposit doesn’t match the net pay on the stub, something went wrong — either with the deposit or with the math.

Cross-check the YTD column too. Year-to-date gross should equal cumulative gross from January 1 forward. A mismatch usually means a payroll system change or a missed period that needs reconciliation.

Reading a pay stub takes less time than the time you’ll spend disputing an error you missed for six months. Build the habit on the next paycheck.