How to Read a Pay Stub Explained

A pay stub is the itemized record your employer gives you each payday, showing exactly how your gross earnings turned into the smaller number that lands in your bank account. Reading it correctly helps you catch payroll errors, budget accurately, and understand where every dollar of your paycheck actually goes.

At a Glance

• A pay stub breaks down into three main parts: earnings, tax withholdings, and other deductions.
• Gross pay is what you earned before anything is subtracted; net pay is what actually hits your account.
• FICA taxes fund Social Security and Medicare, and both you and your employer split the cost.
• Insurance premiums, retirement contributions, and HSA or FSA deposits often show up as separate line items.
• You can typically pull up your pay stub through your employer's payroll portal or by asking HR directly.

What Actually Shows Up on the Document

Every stub starts with basic identifying details: your name, Social Security number, and sometimes an employee ID. From there it moves into the pay period, which is the stretch of dates the paycheck covers, something like March 1 to March 15 if you're paid biweekly. You'll also see the pay date itself, which is simply the day the money arrives.

Hourly workers usually see their rate multiplied by hours worked, plus any overtime. Salaried employees instead see a flat amount tied to the pay period, occasionally with a bonus line added. Either way, this section leads into gross pay, the total earned before taxes or deductions touch it. Nearby you'll usually spot a year to date figure, often labeled YTD, which tracks your cumulative earnings, deductions, and net pay for the calendar year so far.

Quick Facts

• Social Security tax is 6.2% from the employee and 6.2% from the employer, for a combined 12.4%.
• Medicare tax is 1.45% from each side, totaling 2.9%, with no wage cap.
• The Social Security taxable wage limit for 2025 is $176,100.
• Earnings above $200,000 in a year trigger an extra 0.9% Additional Medicare Tax on the amount over that threshold.
• Florida and Texas are among the states that skip state income tax entirely.

Why the Tax Lines Cause the Most Confusion

Federal income tax withholding is really an estimate. Your employer reports your salary and the dependents listed on your W-4 form to the federal government, and the IRS uses that information to calculate roughly how much tax you'll owe for the year. That amount gets divided across your paychecks, whether you're paid 12, 24, or 26 times annually. Hourly workers go through a similar process, with employers projecting monthly income and withholding a matching percentage.

Sometimes the withholding is off, maybe because you switched jobs or had a child, and your actual tax liability shifts. When that happens, updating your W-4 with HR or notifying the IRS keeps your withholding accurate. Overpay throughout the year and you'll get that difference back as a refund.

State and local taxes work on the same logic where they apply, though the rates and rules vary widely by location. Some states charge no income tax at all, and not every city or county levies a local tax either. Where they do exist, the withheld amount generally stays consistent paycheck to paycheck as long as your earnings don't change.

FICA taxes, named for the Federal Insurance Contributions Act, are the ones people tend to misunderstand. They fund Social Security and Medicare, split evenly between you and your employer. Social Security withholding stops once your wages hit the annual cap ($176,100 for 2025), but Medicare withholding has no ceiling, and high earners face that additional 0.9% surcharge past $200,000.

Comparing the Common Deduction Categories

Beyond taxes, most stubs list a handful of other deductions that chip away at your gross pay. These typically fall into a few recognizable buckets, and knowing what each one does makes the whole document far less intimidating.