How to Read a Pay Stub: Every Section Explained

Most people glance at the net pay (bottom line) and file their pay stub away. But your pay stub is a detailed financial document that reveals exactly what you earn, what the government takes, what your benefits cost, and what your employer pays on your behalf. Understanding every line helps you catch errors, verify your withholding, and make smarter benefits decisions.

See how your pay stub numbers break down with our Paycheck Calculator.

The Anatomy of a Pay Stub

While formats vary by employer and payroll provider, every pay stub contains the same core sections:

1. Employee and employer information
2. Pay period details
3. Earnings breakdown (gross pay)
4. Pre-tax deductions
5. Tax withholdings
6. Post-tax deductions
7. Net pay
8. Year-to-date (YTD) totals

Section 1: Earnings (Gross Pay)

Line Item	What It Means
Regular Hours	Hours worked at base rate
Overtime	Hours above 40/week at 1.5× base rate
Holiday Pay	Paid holiday hours
Bonus / Commission	Variable compensation
Sick / PTO	Paid time off used
Gross Pay	Total before any deductions

How to verify: If you are hourly, multiply your rate by hours worked. If you are salaried, divide your annual salary by the number of pay periods per year:

• Weekly (52 periods): $60,000 ÷ 52 = $1,153.85
• Biweekly (26 periods): $60,000 ÷ 26 = $2,307.69
• Semi-monthly (24 periods): $60,000 ÷ 24 = $2,500.00
• Monthly (12 periods): $60,000 ÷ 12 = $5,000.00

Section 2: Pre-Tax Deductions

Pre-tax deductions come out before taxes are calculated, reducing your taxable income:

Deduction	Description
Traditional 401(k)	Retirement contribution (reduces federal & most state taxable income)
Health Insurance Premium	Employer-sponsored plan (Section 125, pre-tax)
Dental / Vision Premium	Same as health — pre-tax under cafeteria plan
HSA Contribution	Health Savings Account (triple tax advantage)
FSA Contribution	Flexible Spending Account (use-it-or-lose-it)
Dependent Care FSA	Childcare spending account
Commuter Benefits	Pre-tax transit or parking (up to $325/month in 2026)

Key insight: Every dollar of pre-tax deduction saves you your marginal federal tax rate + state rate + 7.65% FICA. A $500/month health insurance deduction in the 22% bracket saves approximately $500 × (22% + 5% + 7.65%) ≈ $173/month in taxes.

Section 3: Tax Withholdings

This is where federal, state, and FICA taxes are deducted:

Tax Line	Rate / Notes
Federal Income Tax	Based on W-4, filing status, and taxable income
State Income Tax	Varies by state (0% to 13.3%)
Social Security (OASDI)	6.2% of gross, up to $176,100/year
Medicare	1.45% of all gross (no cap)
Local / City Tax	Applicable in some cities (NYC, Philadelphia, etc.)

How to verify FICA: Social Security should be exactly 6.2% of your gross pay (before pre-tax deductions). Medicare should be exactly 1.45%. If these numbers look off by more than a few cents (rounding), contact payroll.

Example verification for $3,000 gross biweekly pay:

• SS: $3,000 × 0.062 = $186.00
• Medicare: $3,000 × 0.0145 = $43.50

Section 4: Post-Tax Deductions

These come out after taxes are calculated and do not reduce your taxable income:

Deduction	Description
Roth 401(k)	After-tax retirement contribution
Life Insurance (>$50K)	Imputed income on employer-paid coverage
Disability Insurance (voluntary)	Supplemental disability coverage
Wage Garnishment	Court-ordered deduction (child support, student loans)
Charitable Payroll Deduction	Optional giving programs
Union Dues	If applicable

Section 5: Net Pay

Net Pay = Gross Pay − Pre-Tax Deductions − Taxes − Post-Tax Deductions

This is the amount deposited to your bank account. Verify it matches your direct deposit or check amount. Small discrepancies over time add up: even a $20/paycheck error costs you $520/year on a biweekly schedule.

Section 6: Year-to-Date (YTD) Totals

YTD columns show cumulative totals since January 1:

YTD Line	Why It Matters
YTD Gross Pay	Tracks against W-2 at year end
YTD Federal Tax Withheld	Verify against your expected annual tax bill
YTD Social Security	Should stop once YTD wages hit $176,100
YTD Medicare	Continues all year, no cap
YTD 401(k)	Track against annual limit ($23,500)

Tax refund check: If your YTD federal withholding is much higher than your expected annual tax liability, you are overwithholding and will get a large refund. Adjust your W-4 to keep more money in each paycheck instead.

Common Pay Stub Errors to Watch For

Error	How to Catch It
Wrong pay rate	Recalculate gross pay from rate × hours
Missing overtime	Anything over 40 hours in a workweek should be at 1.5×
Incorrect FICA	Verify 6.2% SS and 1.45% Medicare exactly
Wrong 401(k) amount	Compare to your enrollment percentage
SS tax not stopping	After YTD wages hit $176,100, SS deduction should cease
Duplicate deductions	Review all lines for unexpected entries
Wrong filing status	Compare federal withholding to your W-4 on file

If you find an error, document it in writing and report it to your payroll or HR department. Employers are required to correct errors and can issue amended W-2s if needed.

Using Your Pay Stub to Improve Your Finances

Your pay stub is a planning tool. Use it to:

• Verify you are on track to hit 401(k) limits by year end
• Confirm you are claiming the right deductions
• Decide if you should adjust W-4 withholding
• Calculate your available take-home for budgeting

Model any pay scenario — different salary, different deductions — with our Paycheck Calculator.