How to Read Your Pay Stub: Every Line Explained

Getting your paycheck and seeing a number much smaller than your salary is confusing. Where did the money go? This guide walks through every single line on a typical US pay stub so you know exactly what you are paying and why.

Gross Pay vs. Net Pay

Gross pay is your total earnings before any deductions — your salary or hourly rate × hours worked. Net pay (also called take-home pay) is what actually lands in your bank account after all deductions are taken out. The gap between these two numbers can be 25–35% of your gross pay for most workers.

Federal Income Tax Withholding

This is the largest deduction for most workers. Your employer withholds federal income tax based on the W-4 you filled out when you were hired. The amount depends on your filing status, allowances, and income level. Federal tax brackets for 2026 range from 10% to 37%.

The 2026 standard deduction is $15,000 for single filers and $30,000 for married filing jointly. This means the first $15,000 of your annual income is tax-free. Everything above that is taxed at your marginal rate.

FICA: Social Security & Medicare

FICA stands for Federal Insurance Contributions Act. It consists of two parts:

• Social Security: 6.2% of wages up to $184,500 (2026 wage base). Above this cap you pay no more SS tax.
• Medicare: 1.45% of all wages with no cap. High earners (over $200k single / $250k married) pay an additional 0.9% surtax.

Your employer matches your FICA contributions dollar for dollar — so the total FICA cost is actually 15.3%, split 50/50 between you and your employer. Self-employed workers pay the full 15.3%.

State Income Tax

Nine states have no state income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. If you live in one of these, this line on your pay stub will be $0.

Other states range from flat rates like Pennsylvania (3.07%) to progressive rates like California (up to 13.3%). Your employer withholds based on the state W-4 equivalent you filed.

Pre-Tax Deductions (The Good Ones)

These deductions reduce your taxable income — meaning you pay less in all taxes above:

• 401(k) contributions: Up to $23,500 in 2026 ($31,000 if age 50+). Reduces federal and state taxable income.
• HSA contributions: Up to $4,300 individual / $8,550 family in 2026. Triple tax-advantaged.
• Health insurance premiums: Employer-sponsored plans are typically pre-tax.
• FSA contributions: Flexible Spending Account, up to $3,300 for healthcare.
• Dependent care FSA: Up to $5,000 per household.

Post-Tax Deductions

These come out after taxes are calculated, so they do not reduce your taxable income:

• Roth 401(k) contributions (you pay taxes now, tax-free in retirement)
• Life insurance premiums above $50,000 coverage
• Wage garnishments (child support, student loans, court orders)
• Union dues

YTD (Year-to-Date)

Most pay stubs show a YTD column next to current period amounts. YTD shows the running total of earnings and deductions since January 1. This is useful for tracking when you will hit the Social Security wage cap ($184,500), confirming your 401(k) contributions for the year, and tax preparation.

Complete Pay Stub Example

Example: $75,000/year salary, Texas, single, biweekly pay period, $4,680/year 401(k)

Calculate Your Exact Take-Home Pay

Use our free calculator — enter your salary and see every deduction broken down instantly.

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