Your pay stub arrives every payday, but most people glance at the net pay number and ignore the rest. Understanding every line can help you catch errors, make smarter decisions about your withholding, and stop wondering where all the money went.
This guide walks through a typical pay stub from top to bottom, explaining what each section means and why it matters.
What a pay stub looks like
Here's a simplified example of a pay stub for a salaried employee in Texas earning $65,000 per year, paid bi-weekly:
Gross pay — your starting number
Gross pay is your total earnings before any taxes or deductions are taken out. For salaried employees, this is simply your annual salary divided by the number of pay periods (26 for bi-weekly). For hourly workers, it's your hourly rate multiplied by hours worked, plus any overtime.
This is the number your employer agreed to pay you. Everything else on the pay stub is subtracted from this.
Overtime pay
If you're a non-exempt hourly worker covered by the Fair Labor Standards Act (FLSA), any hours over 40 in a workweek must be paid at 1.5 times your regular rate. Some employers and states (like California) have stricter rules. Your pay stub should show regular hours and overtime hours separately.
Federal income tax
Federal income tax is withheld from each paycheck based on your W-4 form — the one you fill out when you're hired. The amount withheld depends on:
- Your filing status (Single, Married Filing Jointly, Head of Household)
- Any additional withholding amounts you requested
- Whether you claimed exemption from withholding
- Your gross income for the period
The IRS uses progressive tax brackets — meaning higher income gets taxed at higher rates, but only the portion above each threshold. For 2026, federal brackets range from 10% to 37%.
Common confusion: Your "tax bracket" refers to your highest marginal rate, not the rate applied to all your income. Someone in the 22% bracket doesn't pay 22% on everything — they pay 10% on the lowest portion, 12% on the next, and 22% only on income above the 22% threshold.
FICA taxes — Social Security and Medicare
FICA stands for the Federal Insurance Contributions Act. These two taxes fund Social Security and Medicare and are separate from federal income tax.
- Social Security (6.2%)
- Withheld on wages up to the annual wage base limit — $176,100 in 2026. Once you earn above that amount in a year, Social Security withholding stops for the rest of the year. Your employer also pays 6.2% on your behalf, for a total of 12.4% going into the Social Security system.
- Medicare (1.45%)
- There is no wage base cap on Medicare. It applies to all earned income. High earners (above $200,000 for single filers, $250,000 for married joint filers) also pay an Additional Medicare Tax of 0.9%, which is withheld when your wages exceed those thresholds.
State income tax
If you live and work in a state that has an income tax, your employer will also withhold state taxes. Nine states have no income tax at all: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming.
State income tax rates vary widely. Some states like Pennsylvania use a flat rate (3.07%), while others like California use progressive brackets that climb as high as 13.3% for top earners.
Pre-tax deductions — the ones that reduce your taxes
Pre-tax deductions are subtracted from your gross pay before federal and state income taxes are calculated. This is a meaningful benefit — every dollar going into a pre-tax account reduces your taxable income by a dollar.
401(k) and retirement contributions
Traditional 401(k) contributions are pre-tax. For 2026, you can contribute up to $23,500 per year (or $31,000 if you're 50 or older). These contributions grow tax-deferred — you'll pay taxes when you withdraw in retirement, ideally at a lower rate.
Health insurance premiums
If your employer offers health insurance through a Section 125 cafeteria plan, your premium contributions are typically pre-tax. The same applies to dental, vision, and Flexible Spending Account (FSA) contributions.
HSA contributions
If you have a High Deductible Health Plan (HDHP), you may contribute to a Health Savings Account (HSA) on a pre-tax basis. For 2026, limits are $4,300 for self-only coverage and $8,550 for family coverage.
Post-tax deductions
Some deductions come out after taxes are calculated. Common examples include:
- Roth 401(k) contributions (taxed now, tax-free in retirement)
- Life insurance premiums above $50,000 coverage
- Wage garnishments (court-ordered, e.g. for child support)
- Union dues
- Charitable contributions through payroll
Net pay — what actually hits your account
Net pay (sometimes called "take-home pay") is what remains after all taxes and deductions. This is the amount deposited into your bank account or printed on your check.
Net pay = Gross pay − All taxes − All deductions
Enter your details into our free calculator for a full breakdown.
Year-to-date (YTD) totals
Most pay stubs include a YTD column alongside the current-period figures. Year-to-date totals show how much you've earned and how much has been withheld in taxes and deductions since January 1 of the current year. These numbers are useful for:
- Tracking whether you're on pace to hit 401(k) contribution limits
- Confirming Social Security withholding stops after the wage base is reached
- Preparing to file your tax return (your W-2 should match your final YTD figures)
Common pay stub errors to watch for
Payroll errors happen more often than most people realize. Here's what to check:
- Wrong pay rate: If you got a raise, confirm the new rate is reflected immediately.
- Missed overtime: Hourly workers should verify overtime hours are paid at 1.5× (or higher).
- Wrong filing status: If your W-4 has the wrong status, you could be over- or under-withholding federal tax all year.
- Duplicate deductions: Occasionally a benefit deduction is taken twice in the same period. Compare to previous stubs.
- Social Security withheld above wage base: If you've exceeded $176,100 in wages for the year, Social Security (6.2%) should stop.
What to do if something looks wrong
Contact your payroll department or HR directly. Bring your pay stub and clearly describe the discrepancy. Payroll errors that result in underpayment must be corrected — in most states your employer is legally required to do so promptly. Overpayments are typically corrected in future pay periods.
If you're unsure about your tax withholding, the IRS Tax Withholding Estimator (available at irs.gov) can help you determine whether your current W-4 elections are appropriate.