Updated for 2026 rates

How to Read a Pay Stub

By the lazysmirk team · Published Jul 11, 2026
Quick answer

Every US pay stub follows the same arithmetic: gross pay, minus pre-tax deductions, minus taxes withheld, minus post-tax deductions, equals net pay (the amount deposited in your account). The stub also shows employer contributions, which are paid on top of your wages and never come out of your check, and year-to-date columns that track every line since January 1. Read it top to bottom once and you can spot a payroll error in under a minute.

  • The order of subtraction matters: pre-tax deductions come out before taxes are computed, so a 401(k) or health premium lowers your tax withholding, not just your net pay.
  • Not all pre-tax deductions are equal. Section 125 health premiums, HSA and FSA payroll contributions skip both federal income tax and FICA; a traditional 401(k) skips federal income tax only, so Social Security (6.2%) and Medicare (1.45%) still apply to it.
  • The YTD columns are the audit trail. Checking them once a quarter catches wrong filing status, a missing 401(k) match, or the wrong state before it becomes a tax-season surprise.

Gross pay: regular, overtime, and bonus

Gross pay is everything you earned this period before anything is taken out. Salaried employees usually see one "Regular" line: annual salary divided by the number of pay periods. Hourly employees see hours multiplied by rate, and the earnings block can carry several lines:

  • Regular: base hours at your base rate.
  • Overtime: hours over 40 in a workweek at 1.5x your regular rate under federal law (some states, like California, add daily overtime). Check the rate printed on the line, not just the total; a common payroll error is paying overtime at 1.0x. Our overtime pay calculator shows what the line should be.
  • Bonus or commission: usually listed separately because supplemental wages are often withheld at a flat federal rate rather than your W-4 rate.
  • PTO, holiday, sick: paid at your regular rate but tracked on their own lines so leave balances reconcile.
  • Imputed income: the taxable value of non-cash benefits (group life insurance over $50,000, some gym or tuition perks). It raises your taxable wages without adding cash to the check.

Everything below this block is subtraction. If gross is wrong, every later line is wrong too, so check it first.

Pre-tax deductions: money out before taxes are computed

Pre-tax deductions come out of gross pay before taxes are calculated, which is why they cost you less in take-home pay than their face value. The critical nuance: different pre-tax deductions skip different taxes.

Which taxes each pre-tax deduction avoids
DeductionSkips federal income tax?Skips FICA (Social Security + Medicare)?
Traditional 401(k) / 403(b)YesNo
HSA (through payroll)YesYes
Health / dental / vision premiums (Section 125)YesYes
FSA (health or dependent care)YesYes
Commuter benefitsYesYes

This is why your stub shows two different wage bases. "Federal taxable wages" equals gross minus all pre-tax deductions. "Social Security wages" and "Medicare wages" equal gross minus only the FICA-exempt ones, so your 401(k) deferral is still inside them. A traditional 401(k) contribution (up to $24,500 in 2026) reduces the federal income tax line but not the Social Security or Medicare lines. An HSA contribution through payroll reduces all three, which is why the 401(k) calculator and HSA math give slightly different per-dollar savings.

Most stubs print both the deduction amount and, for percentage-based deferrals, the election (for example "401K 6%"). If your election and the printed percentage disagree, payroll has stale data.

Taxes withheld: the four (or five) lines that shrink the check

The tax block is where most of the money goes, and each line is computed on a different wage base at a different rate:

  • Federal income tax withholding: an estimate of your annual federal tax, spread across the year. It is driven by your W-4 (filing status, dependents, extra withholding) and your federal taxable wages for the period. It is the only tax line you can directly tune: file a new W-4 and it changes on the next check.
  • Social Security (often "OASDI" or "FICA-SS"): a flat 6.2% of Social Security wages, but only up to the annual wage base of $184,500 in 2026. Earn more than that and the line disappears late in the year, which is why high earners get a visible raise in the fall.
  • Medicare ("FICA-Med"): 1.45% of Medicare wages with no cap, plus an Additional Medicare Tax of 0.9% withheld on wages above $200,000 regardless of filing status.
  • State income tax: present in 41 states plus DC; nine states (including Texas, Florida, and Washington) withhold nothing. Computed from your state withholding certificate.
  • Local taxes: some cities and counties (New York City, most of Ohio and Pennsylvania) add their own line, and a few states add small items like state disability insurance (California SDI) or paid family leave premiums.

Remember that federal income tax withholding is a prepayment, not the final bill; the return you file settles the difference. FICA, by contrast, is exact: flat rates on defined wages, so those lines should always be verifiable to the penny. You can rebuild the whole block for your own numbers with the paycheck calculator.

Post-tax deductions: money out after taxes

Post-tax deductions come out after every tax line has been computed, so they reduce net pay dollar for dollar with no tax benefit on the way in. Common lines:

  • Roth 401(k): the same paycheck deferral as a traditional 401(k), but taxed now so qualified withdrawals are tax-free later. It appears below the tax block, and your taxable wages are not reduced by it.
  • Wage garnishments: court-ordered child support, tax levies, or creditor garnishments. Federal law caps most creditor garnishments at 25% of disposable earnings; the stub should show the order reference.
  • After-tax insurance: supplemental life, disability buy-up, pet insurance, and similar voluntary coverage. Disability premiums paid after tax have a real upside: the benefit is tax-free if you ever claim it.
  • Other: union dues, charitable payroll giving, stock purchase plan (ESPP) contributions, repayment of a payroll advance.

A quick sanity rule: if a deduction is supposed to lower your taxes and it appears below the tax lines, it is being processed post-tax by mistake. That exact mix-up (traditional 401(k) coded as Roth, or vice versa) is worth catching in the first pay period, not at tax time.

Employer contributions: shown on the stub, not taken from you

Many stubs include a block labeled "Employer paid benefits" or "Company contributions". Nothing in it is deducted from your pay; it is information about what your employer spends on top of your wages:

  • Employer FICA match: your employer pays the same 6.2% Social Security and 1.45% Medicare that you do, separately from your withholding.
  • 401(k) match: the employer deposit that follows your deferral (for example 50% of the first 6% you contribute). This is the line to watch: if you are contributing and the match line reads $0, escalate it the same week.
  • Employer share of health premiums: typically 70 to 85% of the true cost of coverage; your $120 deduction may sit next to a $600 employer line.
  • HSA employer seed, life and disability premiums, unemployment insurance (FUTA/SUTA).

This block is the honest answer to "what is my total compensation": salary plus everything listed here. It is also why a job offer with a stronger match and richer premium coverage can beat a nominally higher salary.

Net pay and the YTD columns

Net pay is the arithmetic result: gross pay minus pre-tax deductions, minus taxes, minus post-tax deductions. It should match your bank deposit exactly (or the sum of deposits, if you split direct deposit across accounts). For most single filers with a 401(k) and health coverage, net lands between 70% and 80% of gross; see where you fall with the take-home pay calculator.

Next to every current-period number sits a year-to-date (YTD) column: the running total since January 1. The YTD columns are more useful than the current-period ones, for three reasons:

  • They preview your W-2. YTD federal taxable wages become Box 1, YTD Social Security wages become Box 3, YTD Medicare wages become Box 5. If the December stub and the W-2 disagree, one of them is wrong.
  • They track annual limits. YTD 401(k) against the $24,500 deferral limit, YTD Social Security wages against the $184,500 wage base, YTD HSA and FSA against their caps. Payroll systems usually stop at the limit automatically, but job changers mid-year must track the 401(k) limit themselves because the new payroll system cannot see the old one.
  • They expose slow leaks. A deduction that started one period late, a match that quietly stopped in March, or a bonus that never hit the 401(k) deferral all show up as YTD totals that do not match your own math.

Habit worth keeping: check the YTD columns on the first stub of each quarter. Four checks a year is enough to catch almost anything early.

Worked example: $75,000, semi-monthly, 6% 401(k)

Here is a full stub for a single filer earning $75,000 per year, paid semi-monthly (24 checks), contributing 6% to a traditional 401(k), with a $120/month pre-tax health premium ($60.00 per check). The health premium skips FICA, so Social Security and Medicare are computed on $3,065.00, while federal withholding is computed on $2,877.50 of federal taxable wages (the 401(k) comes out of that base too).

Sample semi-monthly stub: $75,000 salary, single filer, 2026 rates
Stub lineThis periodHow it is computed
Gross pay (Regular)$3,125.00$75,000 / 24 pay periods
401(k), traditional (pre-tax)-$187.506% of $3,125.00 gross
Health premium (pre-tax, Sec. 125)-$60.00$120/mo x 12 / 24 checks
Federal income tax (estimate)-$265.13Annualized taxable wages, standard deduction, 2026 single brackets
Social Security (OASDI)-$190.036.2% of $3,065.00 (gross minus health premium)
Medicare-$44.441.45% of $3,065.00
State income tax$0.00No-income-tax state in this example; yours may add a line
Net pay$2,377.89Gross minus all deductions and taxes

Net pay is $2,377.89, about 76% of gross. Two things worth noticing in the math: the 401(k) line reduced federal withholding but not the FICA lines (Social Security wages are $3,065.00, not $2,877.50), and the federal line is an estimate: actual withholding depends on the W-4 on file and your employer's payroll method, and the annual return settles any difference. Rebuild this table with your own salary, state, and elections in the paycheck calculator.

Red flags: five things to check on every stub

You do not need to audit every line every period. These five checks catch nearly all real payroll errors, and each takes seconds:

  • Wrong filing status or W-4 data. The header says "Married" when you filed single, or vice versa. Wrong status means wrong withholding all year and a surprise bill or oversized refund in April.
  • Missing 401(k) match. You are deferring, but the employer contribution block shows no match. Matches misconfigured at enrollment are common, and some plans will not retroactively fund missed matches unless you flag them.
  • Wrong state. After a move or a remote-work change, payroll may still withhold for the old state. You will eventually get it back by filing a nonresident return, but that is months of interest-free lending plus paperwork.
  • Overtime at the wrong rate. The overtime line should show at least 1.5x your regular rate on hours over 40 per workweek. Also check that nondiscretionary bonuses are folded into the overtime rate; under federal rules they must be.
  • FICA lines that fail the arithmetic. Social Security should be exactly 6.2% of Social Security wages (until YTD wages hit $184,500), and Medicare exactly 1.45%. These are flat rates, so any mismatch means the wage base is wrong, usually because a pre-tax deduction is coded into the wrong category.

When something is off, act in the same pay period: email payroll with the stub attached and the specific line named. Corrections are trivial in the current quarter and painful after W-2s are issued.

Run your own numbers

Rebuild your own paycheck line by line.

The paycheck calculator runs your salary, state, filing status, 401(k), and health premiums through the same 2026 tax engine used in this guide, and shows every line from gross to net.

Check my paycheck
FAQ

How to Read a Pay Stub, answered.

The questions people actually ask about this topic, in plain language.

Written for borrowers, not bankersPlain-language, jargon-freeReviewed quarterly
What is the difference between gross pay and net pay?

Gross pay is everything you earned in the period: salary or hours times rate, plus overtime, bonuses, and PTO. Net pay is what actually hits your bank account after pre-tax deductions, taxes, and post-tax deductions are subtracted. For most people with a 401(k) and health coverage, net pay lands around 70 to 80% of gross.

Why is my 401(k) contribution still subject to Social Security and Medicare?

The tax code exempts traditional 401(k) deferrals from federal income tax but not from FICA. So Social Security (6.2% up to $184,500 of wages in 2026) and Medicare (1.45%) are computed on your wages before the 401(k) comes out. Section 125 health premiums, HSA, and FSA payroll contributions do skip FICA.

What does OASDI mean on my pay stub?

OASDI stands for Old-Age, Survivors, and Disability Insurance: it is the Social Security tax. In 2026 it is a flat 6.2% of your Social Security wages, and it stops for the year once your year-to-date wages reach $184,500.

Why did my federal withholding change when my salary did not?

The usual causes: you changed a pre-tax deduction (a higher 401(k) percentage or new health election lowers taxable wages), you submitted a new W-4, the IRS updated the annual withholding tables in January, or a bonus in the period was withheld at the flat supplemental rate. Any of these moves the federal line without a raise.

What are YTD columns and why should I check them?

YTD (year-to-date) columns show the running total of each line since January 1. They preview your W-2 boxes, track you against annual limits like the 401(k) deferral cap and the Social Security wage base, and expose slow errors like a match that stopped mid-year. Checking them quarterly catches most payroll mistakes early.

Is a pay stub the same as a paycheck?

No. The paycheck (or direct deposit) is the money; the pay stub is the itemized statement explaining it. With direct deposit, the stub usually lives in your payroll portal (Workday, ADP, Gusto, Paychex) rather than on paper. Keep or download your final stub each year; it is your backup if the W-2 is wrong.

Why is my semi-monthly check different from my biweekly friend with the same salary?

Semi-monthly means 24 checks per year and biweekly means 26, so each semi-monthly check is about 8% larger for the same annual salary. Biweekly employees also get two "three-paycheck months" each year. The annual totals are identical; only the slicing differs.

What should I do if I find an error on my pay stub?

Contact payroll or HR in writing during the same pay period, attach the stub, and name the specific line and the number you expected. Same-quarter corrections are routine; errors discovered after W-2s go out require amended forms. For missing 401(k) matches, ask for a written correction timeline, since some plans limit retroactive funding.