Understanding Your Pay Stub: Every Line Explained
A complete guide to reading your pay stub. Understand gross pay, net pay, federal and state taxes, Social Security, Medicare, YTD totals, and every deduction line.
Your pay stub contains more information than most people ever read. Understanding every line helps you catch errors, optimize deductions, and know exactly where your money goes. Here's a complete breakdown.
Gross Pay
Gross pay is your total earnings before any deductions — what your employer agreed to pay you. For hourly workers, it's your hourly rate × hours worked. For salaried workers, it's your annual salary ÷ number of pay periods. Use our hourly to salary calculator to verify your gross figures, and our biweekly paycheck calculator to cross-check the gross amount.
Federal Income Tax Withholding
This is estimated based on your W-4 form. Your employer withholds according to IRS Publication 15 tables, using your filing status and allowances. The actual tax owed is settled when you file your return. If you consistently receive large refunds, you're over-withholding — consider updating your W-4 to keep more money per paycheck.
State Income Tax
State income tax varies from 0% (nine states) to over 13% (California at the top bracket). Our salary after tax calculator shows your expected state withholding for comparison. If the amount on your stub looks wrong, check your state's withholding tables.
Social Security (OASDI)
Social Security tax is 6.2% of your wages up to the annual wage base ($168,600 currently). Your employer pays an equal 6.2%. Once you hit the wage base cap for the year, this deduction stops appearing on your pay stubs — your take-home increases for the rest of the year.
Medicare
Medicare tax is 1.45% on all wages, with no cap. High earners (over $200,000 single / $250,000 married) pay an additional 0.9% Medicare surtax, which your employer may or may not withhold — it's reconciled at tax time.
Pre-Tax Deductions
Contributions to 401(k), 403(b), HSA, FSA, and most employer health insurance premiums are deducted from gross pay before federal income tax is calculated. This reduces your taxable income and therefore your federal and state withholding.
YTD (Year-to-Date)
YTD columns show cumulative totals for the calendar year. Compare your YTD gross against your expected annual salary to catch any payroll errors. YTD Social Security tax should not exceed $168,600 × 6.2% = $10,453.20 for the year — if it does, your employer owes you a refund.
Net Pay
Net pay is your take-home — gross minus all deductions. Cross-check it with our salary after tax calculator using your annual salary and state. If the numbers differ significantly, look for deductions you may have forgotten (garnishments, additional voluntary deductions, or corrective withholding).