A pay stub (also called a paycheck stub or earnings statement) is the detailed breakdown accompanying your paycheck. It shows how your gross earnings are reduced by taxes, benefit deductions, and other withholdings to arrive at your net (take-home) pay. Understanding every line helps you verify accuracy, maximize tax savings, and plan your finances.
| Description | Hours | Rate | Current | YTD |
|---|---|---|---|---|
| Regular Pay | 80.0 | $36.06 | $2,884.62 | $17,307.72 |
| Overtime Pay | 4.0 | $54.09 | $216.35 | $432.70 |
| Performance Bonus | — | — | $500.00 | $500.00 |
| PTO / Vacation | 0.0 | — | $0.00 | $288.46 |
| Gross Pay | 84.0 | — | $3,600.97 | $18,528.88 |
| Description | Current | YTD | ||
|---|---|---|---|---|
| 401(k) Contribution (6%) | −$216.06 | −$1,111.73 | ||
| Medical Insurance | −$145.00 | −$725.00 | ||
| Dental / Vision | −$22.50 | −$112.50 | ||
| HSA Contribution | −$115.38 | −$576.92 | ||
| Total Pre-Tax Deductions | −$498.94 | −$2,526.15 | ||
| Description | Current | YTD | ||
|---|---|---|---|---|
| Federal Income Tax | −$372.09 | −$1,915.48 | ||
| Social Security (6.2%) | −$223.26 | −$1,148.79 | ||
| Medicare (1.45%) | −$52.21 | −$268.67 | ||
| CA State Income Tax | −$116.57 | −$599.49 | ||
| CA SDI / SUI | −$37.81 | −$194.57 | ||
| Total Taxes | −$801.94 | −$4,127.00 | ||
| Description | Current | YTD | ||
|---|---|---|---|---|
| Roth 401(k) (2%) | −$72.02 | −$370.58 | ||
| Supplemental Life Insurance | −$14.50 | −$72.50 | ||
| Total Post-Tax Deductions | −$86.52 | −$443.08 | ||
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Select a field on the pay stub to see a plain-English explanation of what it means and why it matters.
The Net Pay Formula
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How to Read a Pay Stub
Your pay stub is the official record of how your employer calculated your paycheck. Every pay period, it documents your earnings, the deductions taken on your behalf, and the taxes withheld — resulting in your take-home pay. Knowing how to read a pay stub takes less than five minutes but can save you from payroll errors and tax-time surprises.
Step 1: Verify Your Personal and Pay Period Information
Start at the top. Confirm your name, the last four digits of your Social Security Number, your department, position, pay period dates, and pay date are all correct. Errors here — especially a wrong SSN — can cause problems with Social Security credit and your W-2 at tax time. Your pay date should match your company's published payroll schedule.
Step 2: Check Your Gross Pay
Gross pay is your total earnings before any deductions. For hourly workers it equals hours worked × hourly rate plus any overtime (hours above 40 per week paid at 1.5×). For salaried workers it's your annual salary divided by pay periods (e.g., $75,000 ÷ 26 biweekly periods = $2,884.62). Gross pay also includes bonuses, commissions, and holiday pay for that period. Always verify that the hours listed match your records.
Step 3: Review Pre-Tax Deductions
Pre-tax deductions are subtracted from your gross pay before income taxes are calculated, which lowers your taxable income. Common pre-tax deductions include traditional 401(k) contributions, health and dental insurance premiums, HSA (Health Savings Account) contributions, FSA (Flexible Spending Account) contributions, and commuter benefits. The tax savings can be significant — a $500/month 401(k) contribution effectively costs you less than $500 after the tax reduction.
Step 4: Understand Your Taxes
Tax withholding is calculated on your gross pay minus pre-tax deductions (your taxable income). Federal income tax uses a progressive bracket system based on your W-4 withholding elections. Social Security is a flat 6.2% on wages up to the annual wage base. Medicare is 1.45% on all wages (plus 0.9% on amounts over $200,000). Most states also have income tax. If you recently changed your W-4, moved to a new state, or had a life event, double-check that your withholding amounts have updated correctly.
Step 5: Note Post-Tax Deductions
Post-tax deductions are taken after taxes, so they do not reduce your taxable income the way pre-tax deductions do. Common examples include Roth 401(k) contributions (after-tax now, tax-free later), wage garnishments, union dues, and some supplemental insurance premiums. Check that any Roth contributions are labeled correctly — Roth and traditional 401(k) amounts should appear separately on your pay stub.
Step 6: Confirm Net Pay
Net pay is the bottom line: Gross Pay − Pre-Tax Deductions − Taxes − Post-Tax Deductions = Net Pay. This is the amount deposited into your bank account. Verify it matches your direct deposit. Keep a record of your net pay each period for budgeting — it should match your payroll schedule exactly.
Step 7: Use YTD Totals for Annual Tracking
Year-to-Date (YTD) columns show running totals from January 1 through the current pay period. These numbers are invaluable for verifying your W-2 at tax time (your W-2 gross should match your final December YTD gross), monitoring that you haven't exceeded 401(k) contribution limits ($23,500 in 2026 for under-50), and tracking how much tax you've paid so you can estimate whether you'll owe or get a refund.
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What is the difference between gross pay and net pay?
Gross pay is your total earnings before any deductions — the full amount you earned based on your hours and rate. Net pay (also called take-home pay) is what actually lands in your bank account after all federal and state taxes, pre-tax benefit deductions (like 401(k) and health insurance), and any post-tax deductions have been subtracted.
What are pre-tax deductions on a pay stub?
Pre-tax deductions are amounts taken from your gross pay before income taxes are calculated, which reduces your taxable income. Common examples include 401(k) contributions, health and dental insurance premiums, HSA and FSA contributions, and commuter benefits. Because these lower your taxable income, they save you money on federal and state income tax.
Why is Social Security tax listed separately from Medicare?
Social Security and Medicare are two separate federal programs, each with its own tax rate. Social Security tax is 6.2% of wages up to an annual wage base limit (which adjusts each year). Medicare tax is 1.45% of all wages with no cap, plus an additional 0.9% for wages over $200,000. Your employer matches both rates, paying an equal amount on your behalf.
What does YTD mean on a pay stub?
YTD stands for Year-to-Date. It shows the running totals from January 1 of the current year through the end of the current pay period. YTD figures let you track how much you have earned and paid in taxes so far this year, which is useful for budgeting, verifying your W-2 at tax time, and monitoring 401(k) contribution limits.
Why does my net pay look much lower than my gross pay?
The gap between gross and net pay is caused by federal and state income tax withholding, FICA taxes (Social Security + Medicare), and benefit deductions. A single filer in a mid-income bracket typically loses 25-35% of gross pay to taxes and deductions. Adjusting your W-4 withholding or reviewing your benefit elections can help optimize your take-home pay.
What should I check on every pay stub?
Always verify: your name and SSN last 4 digits are correct, the pay period and pay date match your schedule, gross pay matches your agreed salary or hours × rate, each deduction is expected and the correct amount, and YTD totals are tracking correctly. Errors in payroll do happen — catching them early prevents headaches at tax time.