A pay stub shows your earnings for the pay period, all taxes withheld, any deductions, and your net pay. Start at the top with gross pay. Work down through pre-tax deductions, taxable wages, withholding lines, and post-tax deductions. The final figure is net pay. Year-to-date totals track your cumulative earnings and withholding for the tax year.
- Gross pay is total earnings before any deductions. Net pay is what you receive after all taxes and deductions.
- Social Security (6.2%) and Medicare (1.45%) apply to gross wages. Pre-tax deductions do not reduce these.
- Federal income tax withholding is calculated on taxable wages: gross pay minus pre-tax deductions.
- The Social Security wage base for 2025 is $176,100. Social Security withholding stops once your YTD wages reach that amount.
- Year-to-date figures let you track cumulative withholding and compare it to your expected annual tax liability.
What Is a Pay Stub and What Does It Show?
A pay stub is a record of your earnings and deductions for a single pay period. Your employer produces it with each paycheck or direct deposit. If you receive direct deposit, you typically access your stub through your employer's payroll portal or HR system.
Every stub documents the same categories, though formatting varies by payroll software:
- Gross pay earned during the period
- Pre-tax deductions applied before withholding is calculated
- Federal income tax withheld
- Social Security tax withheld (6.2% of gross wages)
- Medicare tax withheld (1.45% of gross wages)
- State and local income tax withheld where applicable
- Post-tax deductions taken after withholding
- Net pay deposited or issued to you
- Year-to-date totals for each category
Some employers also include pay rate, hours worked by type, accrued paid leave balances, and employer-paid benefit contributions.
What Do the Sections on a Pay Stub Mean?
The breakdown below shows a typical biweekly pay stub for a W-2 hourly employee. Dollar amounts are illustrative. Federal income tax shown is an approximation using 2025 IRS Publication 15-T for a single filer with no additional W-4 adjustments and no state income tax.
How Should You Read a Pay Stub from Top to Bottom?
Most pay stubs flow in this order. Follow the same sequence each time you review yours.
- 1Verify the pay period dates. Confirm the dates match the work period you expected to be paid for. Errors in payroll timing affect your YTD figures.
- 2Check gross pay. For hourly workers: multiply your rate by hours worked, then add any overtime. For salaried workers: your annual salary divided by pay periods per year. Verify this matches your employment agreement.
- 3Review pre-tax deductions. Confirm each benefit election is correct. A wrong deduction amount here reduces your take-home pay and may require a correction.
- 4Check federal income tax withholding. If the amount looks unexpectedly high or low, review your current W-4. Your filing status, Step 3 dependent credits, and Step 4 adjustments all affect this line.
- 5Verify FICA. Social Security should be 6.2% of gross wages. Medicare should be 1.45% of gross wages. If your YTD wages are near $176,100, verify that Social Security withholding has stopped or is being reduced correctly.
- 6Inspect YTD figures. Your cumulative federal tax withheld tells you how much you have paid so far this year. Compare this to last year's total tax to estimate whether you are on track.
What Do Gross Pay, Net Pay, YTD, FICA, and Withholding Mean on a Pay Stub?
The following table defines every field you are likely to see on a standard W-2 employee pay stub.
| Field | What It Means | Where It Comes From |
|---|---|---|
| Pay Period | The date range this paycheck covers | Set by employer's payroll schedule |
| Gross Pay | Total earnings before any deductions | Hours × rate; or salary ÷ pay periods |
| Pre-Tax Deductions | Benefit contributions taken before withholding is calculated | Your benefit elections: 401(k), health insurance, FSA/HSA |
| Taxable Wages | Gross pay minus pre-tax deductions. Federal income tax is calculated on this amount. | Gross − pre-tax deductions |
| Federal Income Tax | Tax withheld using IRS Publication 15-T based on your W-4 | Your W-4 elections + IRS tables |
| Social Security (6.2%) | FICA payroll tax on gross wages | 6.2% of full gross pay; stops at $176,100 YTD for 2025 |
| Medicare (1.45%) | FICA payroll tax on gross wages | 1.45% of all gross pay; no annual limit |
| State Income Tax | State withholding where applicable | State-specific withholding rules and your state form |
| Post-Tax Deductions | Contributions or obligations taken after all taxes | Roth 401(k), wage garnishments, union dues |
| Net Pay | What is deposited or paid to you | Gross pay minus all taxes and deductions |
| YTD | Cumulative totals from January 1 through the current pay period | Running sum updated each pay period |
Why Is My Take-Home Pay Lower Than My Gross Pay?
Every dollar of gross pay passes through multiple deduction layers before becoming net pay. Here is what reduces it and why.
Federal income tax withholding
This is often the largest single deduction on a pay stub. The amount is calculated using the IRS Publication 15-T annualized percentage method. Your employer annualizes your per-period gross wages, applies the tax bracket tables based on your W-4 filing status, then divides the result back to a per-period amount. Your W-4 elections directly control this line.
Social Security and Medicare (FICA)
These are flat rates applied to every paycheck. Social Security is 6.2%. Medicare is 1.45%. They are not affected by your W-4. They are not reduced by 401(k) contributions or health insurance premiums. For 2025, combined FICA is 7.65% on all wages up to the Social Security wage base of $176,100.
Pre-tax benefit deductions
Your 401(k) contribution, health insurance premium, FSA election, and HSA contribution come out before taxes are calculated. These reduce your federal income tax withholding. They do not reduce Social Security or Medicare. A $500/month 401(k) contribution lowers your federal taxable wages by $500 per month but does not reduce your FICA base.
State income tax
Most states with an income tax require employers to withhold at the applicable state rate. Texas, Florida, Nevada, Washington, Wyoming, South Dakota, Alaska, Tennessee, and New Hampshire have no state income tax. If you live in a state with an income tax, it appears as a separate withholding line on your stub.
Post-tax deductions
Roth 401(k) contributions, wage garnishments, and some insurance premiums come out after taxes. These reduce net pay but do not reduce taxable income or FICA wages. They are often listed at the bottom of the deductions section.
Mid-year W-4 changes and benefit enrollment changes
If your withholding looks different than a previous paycheck, check whether a W-4 update or benefit enrollment change took effect. Both can change net pay substantially without any change to gross pay.
Overtime assumptions
A paycheck with fewer overtime hours than expected will show a lower gross pay. Verify regular hours, overtime hours, and rates separately before assuming an error.
At LMN Tax Inc., a common client question is why their Social Security wages on the year-end W-2 differ from their federal wages. The answer is almost always pre-tax deductions. A client contributing 8% to a 401(k) and paying $250/month for health insurance will show federal wages on the W-2 roughly $5,000 lower than Social Security wages. This matters when they try to reconcile their W-2 against their pay stubs. The second most frequent issue is a client who over-withheld during the year because they never updated their W-4 after a filing status change or a child aging out of the dependent credit. Both are visible in the YTD section of the final pay stub of the year.
Real-World Example
Jordan, single filer, Ohio, $52,000 annual salary, biweekly payroll:
- Gross pay per period: $52,000 ÷ 26 = $2,000.00
- 401(k) contribution (4%): $80.00 per period
- Health insurance premium (Section 125): $95.00 per period
- Taxable wages for federal income tax: $2,000 − $80 − $95 = $1,825.00
- Federal income tax withheld: approximately $165.00 (IRS Pub 15-T, 2020+ W-4, Standard Withholding, single, TY 2025)
- Social Security (6.2% × $2,000): $124.00
- Medicare (1.45% × $2,000): $29.00
- Ohio state income tax (approx. 3.5% × $1,825): $63.88
- Net pay: $2,000 − $80 − $95 − $165 − $124 − $29 − $63.88 = $1,443.12
Jordan earns $2,000 gross per period but takes home $1,443. The $557 difference breaks down as: $80 to retirement savings (pre-tax), $95 to health coverage (pre-tax), $165 to federal income tax, $124 to Social Security, $29 to Medicare, and $64 to Ohio state income tax. The retirement and health deductions reduce Jordan's federal income tax by about $29 more than if they had not elected those benefits.
How Our Paycheck Calculators Help You Verify Your Pay Stub
Both paycheck calculators on this site use the same IRS Publication 15-T annualized percentage method your employer applies. You can enter your exact W-4 elections, gross pay, and deductions to produce an independent estimate of what your net pay should be.
If the calculator's output matches your stub, your withholding is consistent with the standard method. If there is a significant difference, check your W-4 on file with your employer and verify whether your employer uses a different authorized method such as the wage bracket method.
Use the Hourly Paycheck Calculator if you are paid by the hour. Use the Paycheck Calculator if you receive a fixed annual salary. Both calculators break down federal income tax, Social Security, Medicare, and optional state income tax in the same format as a pay stub.
What Are Common Mistakes People Make When Reading a Pay Stub?
Confusing gross pay with take-home pay
Job offers are stated in gross salary or hourly rate. Your actual take-home pay is materially lower. The gap typically ranges from 20% to 35% of gross depending on your income level, filing status, state, and benefit elections.
Ignoring YTD figures
A single pay stub shows only one period. YTD figures give you the full picture. If you start a new job mid-year, your YTD federal withholding may be lower than expected because there were fewer pay periods. This can result in under-withholding if your combined annual income is higher than each employer assumes.
Assuming withholding equals your exact tax due
Withholding is an estimate. Your actual tax liability is calculated at filing on Form 1040. If you had other income sources during the year, sold investments, or received a large bonus, your actual tax may differ from the total withheld. Review your YTD withholding against an estimated full-year tax calculation before the filing deadline.
Overlooking pre-tax deduction accuracy
If a benefit deduction changed but your stub still shows the old amount, contact your HR or payroll department. Incorrect deduction amounts accumulate across pay periods and can be difficult to correct retroactively.
Reading one unusual paycheck as the new normal
Bonus checks, retroactive pay adjustments, and commission-heavy periods produce higher gross pay. The federal withholding on that period may look disproportionately high because the employer's calculation annualizes the gross. Your regular paycheck rate will return to normal in the next standard period.
Not verifying FICA rates
Social Security is exactly 6.2% of gross wages. Medicare is exactly 1.45% of gross wages. If your stub shows different percentages, verify whether your employer is using gross wages or a reduced base. Errors here are uncommon but do occur with certain benefit arrangements.
When This Guide May Not Apply
- Multiple employers in the same year: Each employer's YTD figures reflect only that employer's payroll. Your combined annual income requires adding W-2s from all employers. If total wages across employers exceed $176,100, you may have overpaid Social Security tax and can claim a credit on Form 1040.
- Tipped employees: Tips reported through your employer appear as separate earnings and may change how gross pay, taxable wages, and FICA are calculated. Consult your employer's payroll department if you receive reported tips.
- Non-resident aliens: IRS Publication 15 (Supplement for Nonresident Aliens) applies different withholding rules. Standard W-4 instructions and standard stub interpretation may not apply.
- Employees with mid-year FICA-exempt periods: Certain student employees, workers under specific visa categories, and religious order members may have FICA exemptions. Their stubs will not show Social Security or Medicare withholding for those periods.
- Officers of S-Corps or other pass-through entities: Payroll tax obligations differ from W-2 employees. A tax professional's review of reasonable compensation and payroll tax calculations is recommended before relying on stub interpretation alone.
Frequently Asked Questions
What To Do Next
If your pay stub withholding looks lower or higher than expected, start with your W-4. Verify your filing status, dependent credits in Step 3, and any extra withholding in Step 4c. A single-field error on the W-4 can shift withholding by several hundred dollars per year.
Use the Hourly Paycheck Calculator or Paycheck Calculator to run an independent estimate using your current W-4 settings. If the calculator output matches your stub, your withholding is consistent with the IRS standard method. If it does not, contact your payroll department with the specific discrepancy.
For questions about overtime deductions under the OBBBA, see the No Tax on Overtime Guide. For a full overview of your payroll tax obligations as a W-2 employee, return to the Payroll Hub.
If you want a deeper explanation of how FICA is calculated, why Social Security withholding stops partway through the year, and how the employer matching works, the What Is FICA Tax guide covers all of that in detail.
- IRS Publication 15 (Circular E) — Employer's Tax Guide (2025): FICA rates, withholding rules, employer obligations
- IRS Publication 15-T — Federal Income Tax Withholding Methods (2025): percentage method tables used to calculate federal withholding
- IRS Tax Topic 751 — Social Security and Medicare Withholding Rates (2025)
- SSA.gov — Social Security Contribution and Benefit Base: $176,100 for tax year 2025
- IRS Form W-4 — Employee's Withholding Certificate
This guide provides general educational information about pay stubs and payroll withholding. It is not tax or legal advice. Pay stub formats vary by employer and payroll software. Actual withholding amounts depend on individual W-4 elections and employer-specific payroll methods. Consult your employer's payroll department or a qualified tax professional for questions about your specific paycheck.