Disclaimer: This article is for educational purposes only and is not tax, legal, or financial advice. Tax rules change periodically, always check current IRS/state guidance or consult a professional.
Paycheck Calculator (US)
Quick Answer: How Do You Read a Pay Stub?
A pay stub has five core sections: employee information, pay period dates, earnings (gross pay), deductions (taxes and benefits), and totals (net pay). Start at gross pay, subtract pre-tax deductions, then taxes (federal, state, FICA), then post-tax deductions. The result is your net pay, the amount deposited into your bank account.
Formula: Gross Pay − Pre-Tax Deductions − Taxes − Post-Tax Deductions = Net Pay
Key Takeaways
- Your pay stub has five sections. Employee info, pay period dates, earnings, deductions, and totals. Every paycheck follows this structure.
- FICA takes 7.65% from every paycheck. That is 6.2% for Social Security (up to $184,500 in 2026) and 1.45% for Medicare, with no opt-out.
- Pre-tax deductions save you money. A $100 pre-tax 401(k) contribution reduces your take-home pay by only about $81 because it lowers your taxable income.
- Abbreviations are consistent across employers. FIT, OASDI, MED, YTD, and other codes mean the same thing on virtually every pay stub.
- YTD columns are your audit trail. Use year-to-date totals to track progress toward tax thresholds and verify your W-2 at year-end.
- Errors happen more often than you think. Wrong hours, outdated W-4 info, or incorrect benefit elections can cost you real money. Check every pay stub.
What Is a Pay Stub and Why Does It Matter?
A pay stub (also called an earnings statement or wage statement) is the document that accompanies your paycheck. It itemizes everything your employer calculated to arrive at the amount deposited into your bank account. Whether you receive a physical printout or access it through a payroll portal like ADP, Gusto, or Workday, the layout is the same.
Do employers have to provide pay stubs?
The federal Fair Labor Standards Act (FLSA) does not require employers to provide pay stubs. Most states, though, mandate that employers issue itemized wage statements each pay period. Even in states without that requirement, most employers provide pay stubs anyway.
Why you should review every pay stub
Payroll mistakes happen. An incorrect filing status, wrong hours, or a missed benefit election can cost you money that is difficult to recover later. Checking your pay stub every pay period lets you:
- Catch errors early before they compound across multiple pay periods
- Verify your hours match your own records (especially if you are hourly)
- Confirm deductions match what you elected during benefits enrollment
- Prepare for tax season by making sure your withholdings are on track
- Reconcile against your W-2 at year-end to catch discrepancies before filing
Pay Stub Anatomy: The Five Core Sections
Every pay stub, regardless of employer or payroll provider, contains the same five sections. Once you know what to look for, you can read any pay stub in under two minutes.
1. Employee information
Your name, address, employee ID, and usually the last four digits of your Social Security number. Verify this is correct on your first pay stub. An error here can cause tax filing problems later.
2. Pay period and pay date
Three dates to know: the pay period start date, the pay period end date, and the check date (when the money actually hits your account). If you started a job mid-period, your first check covers fewer days than a full period. Some stubs also include a check number for record-keeping.
3. Earnings
This section shows your gross pay broken down by type. Common line items include:
- REG (Regular): Your base pay for the period. For salaried workers, this is annual salary divided by the number of pay periods. For hourly workers, it is hours times your rate.
- OT (Overtime): Hours worked beyond 40 per week, paid at 1.5 times your regular rate (or higher, depending on your employer).
- HOL / PTO: Holiday pay or paid time off, if applicable.
- Bonus / Commission: Any additional compensation above base pay.
4. Deductions
This is where most of your paycheck disappears. Deductions fall into three categories:
- Pre-tax deductions: Items like 401(k) contributions and health insurance premiums that are subtracted before taxes are calculated
- Tax withholdings: Federal income tax, state and local taxes, Social Security, and Medicare
- Post-tax deductions: Roth 401(k), union dues, wage garnishments, and other items subtracted after taxes
5. Totals
The bottom of your pay stub shows three numbers: gross pay (total earnings), total deductions (everything that was withheld), and net pay (your take-home amount). Most stubs also include YTD (year-to-date) columns showing cumulative totals since January 1.
Taxes on Your Pay Stub, Decoded
Taxes are the largest category of paycheck deductions for most workers. Below is what each tax line means, using 2026 figures.
Federal income tax (FIT / FITW)
The amount your employer withholds for federal income tax, based on your W-4 form and the IRS withholding tables. In 2026, federal tax brackets range from 10% to 37%, and the standard deduction is $16,100 for single filers or $32,200 for married filing jointly. Your effective rate depends on your income, filing status, and any adjustments on your W-4.
The 2026 W-4 has been updated under the One Big Beautiful Bill Act (OBBBA) with expanded deductions for qualified tips and overtime income.
State income tax (SIT / SITW)
Most states impose their own income tax. Rates and structures vary: some states use flat rates, others use progressive brackets. Nine states charge no state income tax on wages: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.
Some states also have payroll taxes that appear as separate line items:
- CA SDI: California State Disability Insurance (1.3% of wages in 2026)
- NY PFL: New York Paid Family Leave
- NY DBL: New York Disability Benefits Law
- NJ TDI: New Jersey Temporary Disability Insurance
These are not income taxes, but they appear in the deductions section and reduce your take-home pay.
Social Security (OASDI / FICA-SS)
OASDI stands for Old-Age, Survivors, and Disability Insurance, the official name for Social Security. You pay 6.2% of your gross wages, up to the $184,500 wage base in 2026 (up from $176,100 in 2025). Once your year-to-date earnings hit that cap, Social Security withholding stops for the rest of the year. The maximum employee Social Security tax for 2026 is $11,439.
Medicare (MED / FICA-Med)
Medicare tax is 1.45% on all wages with no cap. If your wages exceed $200,000 (single) or $250,000 (married filing jointly), you pay an additional 0.9% Medicare surtax on earnings above that threshold.
Local and city taxes
Some cities and counties levy their own income taxes. If you work in New York City, Philadelphia, or certain other municipalities, you will see a separate local tax deduction on your stub.
Combined, FICA alone takes 7.65% of every dollar you earn (up to the Social Security cap). Add federal and state income taxes, and most workers lose 25–35% of gross pay to taxes before any benefit deductions.
Common Deductions Beyond Taxes
After taxes, your pay stub may list deductions for benefits you elected during enrollment. Understanding the difference between pre-tax and post-tax deductions matters because it directly affects how much each deduction actually costs you.
Pre-tax deductions (reduce your taxable income)
These are subtracted from your gross pay before taxes are calculated. That means they lower your taxable income, so you pay less in federal and state income tax:
- 401(k) / 403(b): Traditional retirement plan contributions. Reduces federal and state taxable income but not FICA wages.
- Health insurance premiums: Medical, dental, and vision through a Section 125 cafeteria plan. Reduces both income tax and FICA wages.
- HSA (Health Savings Account): Pre-tax through payroll, reducing both income and FICA wages. Requires a high-deductible health plan.
- FSA (Flexible Spending Account): Pre-tax for medical or dependent care expenses, up to annual IRS limits.
- Commuter benefits: Transit passes or parking through a pre-tax arrangement.
Post-tax deductions (do not reduce taxable income)
These come out after taxes, so they reduce your take-home pay dollar-for-dollar:
- Roth 401(k) / Roth IRA: Taxed now, but withdrawals in retirement are tax-free.
- Group term life insurance (GTL): Employer-provided coverage above $50,000 is taxable income, and additional voluntary premiums are post-tax.
- Union dues: Required for union members.
- Wage garnishments: Court-ordered deductions for child support, student loans, or IRS levies.
Why the distinction matters: a $100 example
A $100 pre-tax 401(k) contribution does not reduce your take-home pay by $100. Because it lowers your taxable income, you also save on taxes. Using the California salaried example below, a $100 pre-tax contribution reduces net pay from $1,692.91 to $1,611.51, a difference of only $81.40. You put away $100 for retirement but your paycheck only shrinks by $81.40. Pre-tax deductions stretch every dollar further.
Pay Stub Abbreviations Cheat Sheet
Pay stubs are packed with abbreviations that look cryptic but follow a standard set of codes. Below is a quick-reference table for the most common ones.
Tax abbreviations:
- FIT / FITW: Federal Income Tax (Withholding)
- SIT / SITW: State Income Tax (Withholding)
- FICA: Federal Insurance Contributions Act (Social Security + Medicare combined)
- OASDI: Old-Age, Survivors, and Disability Insurance (Social Security)
- MED: Medicare
- SDI: State Disability Insurance
- PFL: Paid Family Leave
Earnings abbreviations:
- REG: Regular pay (base hours or salary)
- OT: Overtime pay
- HOL: Holiday pay
- PTO: Paid Time Off
- YTD: Year-to-Date (cumulative total since January 1)
Benefits and other abbreviations:
- 401K / ROTH: Retirement plan contributions (traditional or Roth)
- HSA / FSA: Health Savings Account / Flexible Spending Account
- GTL: Group Term Life (insurance)
- EE: Employee (your contribution)
- ER: Employer (company contribution)
If you see an abbreviation not listed here, check with your HR or payroll department. Employer-specific codes (like plan names or internal categories) vary from company to company.
How to Spot Errors on Your Pay Stub
Pay stub errors are more common than most people realize, and they can quietly cost you money over multiple pay periods. Run through this checklist each time you get a paycheck.
Error-checking checklist
- Hours worked: Compare the hours on your stub against your own time records. If you track hours with a time-tracking app, this takes seconds.
- Pay rate: Verify it matches your offer letter or most recent raise notification. If you recently got a raise, confirm it took effect on the correct date.
- Filing status: Check that the federal and state filing status matches what you submitted on your W-4 and state equivalent.
- Benefit deductions: Compare each deduction to your benefits enrollment confirmation. Look for deductions that should have started (or stopped) based on enrollment changes.
- Overtime calculation: For hourly workers, overtime should be at least 1.5 times your regular rate. Calculate it yourself:
regular rate × 1.5 × OT hours. - YTD totals: Your current YTD should equal the previous pay stub's YTD plus the current period amounts. A sudden jump or drop suggests a processing error.
What to do if you find an error
- Document it. Note the specific pay period, the line item in question, and what you believe the correct amount should be.
- Contact HR or payroll. Most companies have a formal process. Reference the exact pay period and check number.
- Follow up in writing. Even if you discuss it verbally, send an email to create a paper trail.
- Verify the correction. Check the next pay stub to confirm the fix was applied and any retroactive adjustment was made.
Tools to cross-check your numbers
Use the Paycheck Calculator to model your paycheck with your salary, state, and filing status. If the calculator's estimate is noticeably different from your pay stub, that may point to a withholding error worth looking into. For federal withholding specifically, the IRS Tax Withholding Estimator is another good cross-reference.
Pay Stub Examples: Line-by-Line Breakdowns (2026)
These examples use 2026 tax rates and were cross-checked with the Paycheck Calculator. Your actual figures will differ based on your W-4 elections, benefit choices, and local taxes.
A salaried worker earning $55,000 per year, paid biweekly (26 pay periods), filing single, working in California with no pre-tax deductions.
- Gross pay (REG): $2,115.38 ($55,000 ÷ 26)
- Federal income tax (FIT): −$170.00
- California state tax (SIT): −$63.15
- California SDI: −$27.50
- Social Security (OASDI): −$131.15 (6.2% of gross)
- Medicare (MED): −$30.67 (1.45% of gross)
- Total deductions: −$422.47
- Net pay: $1,692.91
Take-home percentage: 80.0% of gross. California's state income tax and SDI add about $90 per paycheck compared to a no-income-tax state.
An hourly worker earning $20/hour, working 80 regular hours plus 10 overtime hours in a biweekly period, filing single, working in Texas (no state income tax).
- Regular pay (REG): $1,600.00 (80 hrs × $20/hr)
- Overtime pay (OT): $300.00 (10 hrs × $30/hr)
- Gross pay: $1,900.00
- Federal income tax (FIT): −$144.15
- State tax (SIT): $0.00 (Texas has no income tax)
- Social Security (OASDI): −$117.80 (6.2% of gross)
- Medicare (MED): −$27.55 (1.45% of gross)
- Total deductions: −$289.50
- Net pay: $1,610.50
Take-home percentage: 84.8% of gross. No state income tax in Texas means only federal tax and FICA reduce this paycheck.
Same as Example 1 but with a $100 per paycheck pre-tax 401(k) contribution. This shows how a pre-tax deduction changes the math.
- Gross pay (REG): $2,115.38
- Pre-tax 401(k): −$100.00
- Taxable wages: $2,015.38
- Federal income tax (FIT): −$158.00 (lower because taxable income dropped)
- California state tax (SIT): −$56.55 (also lower)
- California SDI: −$27.50
- Social Security (OASDI): −$131.15 (FICA is based on gross, not reduced by 401(k))
- Medicare (MED): −$30.67
- Net pay: $1,611.51
Bottom line: The $100 401(k) contribution only reduced take-home pay by $81.40 (from $1,692.91 to $1,611.51). The other $18.60 came from tax savings. This is why financial advisors recommend maximizing pre-tax contributions.
Frequently Asked Questions
Pay Stub Tips and Best Practices
- Save every pay stub. Keep digital copies or screenshots. You will need them for apartment applications, loan approvals, tax disputes, and verifying your year-end W-2.
- Check your first three pay stubs at a new job carefully. New employee records are the most likely to contain errors. Verify your pay rate, hours, filing status, and benefit deductions line by line.
- Use the Paycheck Calculator to cross-check your numbers. Enter your salary, state, and filing status. If the estimate is noticeably different from your pay stub, that may point to an error worth looking into.
- Watch your YTD Social Security withholding. Once your year-to-date earnings reach $184,500 in 2026, Social Security deductions should stop. If they continue past that point, flag it with payroll right away.
- Update your W-4 after major life changes. Getting married, having a child, starting a second job, or buying a home with a mortgage all affect your ideal withholding. Submit a new W-4 to adjust.
- Compare your final pay stub to your W-2. Your last pay stub of the year and your W-2 should show the same YTD figures for gross wages and tax withholdings. If they do not match, contact your employer before filing your tax return.
References
- IRS Topic 751: Social Security and Medicare Withholding Rates — Official FICA tax rates, wage base thresholds, and additional Medicare tax rules for 2026.
- SSA Contribution and Benefit Base — Annual Social Security wage base limit ($184,500 in 2026) and historical figures.
- Tax Foundation: 2026 Tax Brackets and Federal Income Tax Rates — Federal income tax brackets, standard deduction amounts, and rate tables for 2026.
- IRS Form W-4 and Instructions — Employee withholding certificate and 2026 updates under the OBBBA.
- U.S. DOL Fact Sheet #21: FLSA Recordkeeping Requirements — Federal rules on what payroll records employers must maintain, including pay stub requirements.
- Consumer Financial Protection Bureau: How to Read a Pay Stub — Educational handout explaining pay stub components for workers and students.