Most people glance at the bottom number on their pay stub — net pay — and ignore everything else. But your pay stub tells the complete story of where your money goes before it reaches your bank account. Understanding each line helps you verify your employer is withholding correctly, optimize your tax situation, and make informed decisions about benefits. This guide walks through every section of a typical pay stub with real examples.
A pay stub has four main sections: earnings (what you made), taxes (what the government takes), deductions (what goes to benefits and savings), and net pay (what you take home). Most stubs also show year-to-date (YTD) totals for each line item.
| Line Item | Current Period | YTD | Category |
|---|---|---|---|
| Gross Pay | $2,884.62 | $75,000.00 | Earnings |
| Federal Income Tax | $310.00 | $8,060.00 | Tax |
| State Income Tax | $130.00 | $3,380.00 | Tax |
| Social Security (6.2%) | $178.85 | $4,650.00 | FICA |
| Medicare (1.45%) | $41.83 | $1,087.50 | FICA |
| 401(k) (6%) | $173.08 | $4,500.00 | Pre-tax deduction |
| Health Insurance | $125.00 | $3,250.00 | Pre-tax deduction |
| HSA Contribution | $75.00 | $1,950.00 | Pre-tax deduction |
| Net Pay | $1,850.86 | $48,122.50 | Take-home |
In this example, net pay is 64.1% of gross pay. Of the 35.9% deducted: taxes take 22.9%, retirement savings 6%, and benefits 6.9%. Use the Paycheck Calculator to model your own numbers.
Gross pay is your total earnings before any deductions. For salaried employees, this is your annual salary divided by the number of pay periods (typically 26 for biweekly, 24 for semi-monthly, or 12 for monthly). For hourly employees, it is hours worked multiplied by your hourly rate, plus any overtime.
Overtime (labeled OT) is typically 1.5 times your regular rate for hours exceeding 40 in a workweek. Some stubs show regular and OT hours separately. Use the Overtime Calculator to verify amounts. Bonuses and commissions usually appear as separate line items and may be taxed at the supplemental withholding rate of 22% federally.
Use the Hourly to Salary Calculator to convert between hourly and annual pay, and the Salary Converter to compare different pay frequencies.
Federal income tax is withheld based on your W-4 form, filing status, and income level. The amount varies by pay period and is calculated using IRS withholding tables. If your withholding seems wrong, use the IRS Tax Withholding Estimator to check. Use the Tax Bracket Calculator to understand your marginal rate.
State income tax varies from 0% (Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming) to over 13% (California top bracket). Some cities also have local income tax (New York City, Philadelphia, etc.). Use the State Income Tax Calculator for your state.
FICA taxes fund Social Security (6.2% up to the wage base) and Medicare (1.45% on all wages). Combined: 7.65%. Your employer matches this amount, so the total FICA contribution is 15.3% of your pay. Once you earn above the Social Security wage base ($168,600 in 2024), Social Security withholding stops for the rest of the year, temporarily increasing your take-home pay.
The W-4 sweet spot: The goal of your W-4 is to have your employer withhold an amount close to your actual tax liability. Getting a $3,000 refund means you overpaid $250/month all year — money that could have been earning interest or paying down debt. Owing $2,000 at tax time means you underpaid and may face penalties. The sweet spot is a refund or amount owed of $200 or less. Use the Tax Withholding Calculator to dial in your W-4.
Pre-tax deductions reduce your taxable income, effectively giving you a tax discount on those expenses. A $500 pre-tax health insurance premium at a 24% federal + 5% state + 7.65% FICA tax rate saves you $183 per month in taxes compared to paying with after-tax money.
Common pre-tax deductions include 401(k)/403(b) contributions (up to $23,500 in 2025 for employees under 50), health/dental/vision insurance premiums, HSA contributions (up to $4,300 individual / $8,550 family in 2025), FSA contributions (up to $3,300 in 2025), and commuter benefits (up to $325/month for transit and parking).
Post-tax deductions do not reduce your taxable income. Common examples include Roth 401(k) contributions (taxed now, tax-free in retirement), life insurance premiums above $50,000 employer-provided coverage, disability insurance, union dues, and wage garnishments. While these do not save you taxes now, Roth contributions provide tax-free growth and withdrawals in retirement.
Model your paycheck with different deductions, tax scenarios, and withholding levels. Use the free Paycheck Calculator to understand your take-home pay — no signup required.
Related tools: Salary Converter · Hourly to Salary Calculator · Tax Bracket Calculator · Tax Withholding Calculator · Overtime Calculator · Net Pay Calculator