Your pay stub is a summary of everything that happened to your money between gross pay and the deposit in your bank account. Most people glance at the bottom line and move on, but knowing how to read it can help you catch errors and make better financial decisions.
The Main Sections of a Pay Stub
Employee & Employer Information
Basic identification: your name, address, employee ID, and your employer's name. Also shows the pay period dates and the pay date.
Earnings
This section shows your gross pay — what you earned before anything is taken out. You may see separate lines for:
- Regular pay — your standard hourly or salary earnings
- Overtime — hours worked beyond 40/week, typically at 1.5× your rate
- Bonus — one-time or periodic additional pay
- Reimbursements — expense reimbursements (usually not taxable)
Pre-Tax Deductions
Amounts taken out before taxes are calculated. These reduce your taxable income:
- 401(k) / 403(b) — retirement contributions
- Health insurance premium — your share of employer-sponsored coverage
- HSA — Health Savings Account contributions
- FSA — Flexible Spending Account contributions
- Dental / Vision premiums
Taxes
| Tax Line | What It Means |
|---|---|
| Federal Income Tax | Withheld based on your W-4 and income |
| Social Security (OASDI) | 6.2% of gross wages, up to $176,100 |
| Medicare (HI) | 1.45% of all gross wages |
| State Income Tax | Varies by state; 0% in 9 states |
| Local Tax | Some cities/counties charge local income tax |
Post-Tax Deductions
Amounts taken out after taxes. These do NOT reduce your taxable income:
- Roth 401(k) contributions
- Life or disability insurance (in some cases)
- Wage garnishments (child support, debt repayment)
- Union dues
YTD (Year-to-Date) Totals
Most pay stubs show both the current period amount and a year-to-date total. This is useful for tracking how much you've paid in taxes so far this year and whether you're on track to hit contribution limits.
Spot errors early. Review your pay stub every paycheck. Common errors include being classified at the wrong exemption level, missing employer contributions, or health insurance deductions that didn't update after open enrollment.
Net Pay
The final line — net pay — is what lands in your bank account. It's your gross pay minus all pre-tax deductions, minus taxes, minus post-tax deductions.
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