How to read your pay stub

Most people look at one number on their pay stub. The interesting information is in all the others.

Your pay stub is the only regular audit you get of whether you're being paid correctly — and most people glance at the net figure and file it. Here's the whole document, line by line, and the errors worth checking for.

The two numbers that matter most

Gross pay is what you earned before anything is taken out. It's the number your hourly rate and hours actually produce, and it's the number our calculator works in.

Net pay — "take-home" — is what actually reaches your bank account after taxes and deductions.

The gap between them is typically substantial, and the whole middle of your pay stub exists to explain it.

The earnings section

At the top you'll see how the gross was built:

Regular — hours worked × your rate. Check this multiplication. It's the single most common place an error hides.
Overtime — hours past 40, which for non-exempt workers must be paid at a minimum of 1.5×. Verify the rate, not just the hours.
PTO / holiday / sick — paid hours you didn't work.
Bonus, commission, tips, shift differential — listed separately. Note that a nondiscretionary bonus can legally raise your "regular rate" for overtime purposes, which means your overtime rate should go up too. Employers get this wrong constantly.

Taxes: the part everyone squints at

Four separate things are usually withheld, and they are not the same kind of thing.

Social Security (may appear as FICA-SS or OASDI)

6.2% of your wages, up to an annual wage cap that rises each year. Your employer pays a matching 6.2% that you never see. Once you cross the cap in a given year, this line stops — which is why some high earners see their take-home jump late in the year.

Medicare (FICA-Med)

1.45% of your wages, with no cap, matched again by your employer. Above $200,000 in a year an additional 0.9% is withheld from the employee only.

Federal income tax withholding

This is not your tax bill. It's an estimate, based on the W-4 you filled out. Withhold too much and you get a refund; too little and you owe in April. If you had a big refund or a nasty surprise last year, the fix is a new W-4 — not a complaint to payroll.

State and local tax

Varies enormously. A handful of states have no income tax at all. Some cities levy their own on top.

Deductions: pre-tax vs. post-tax

This distinction is quietly worth real money.

Pre-tax deductions come out before tax is calculated, so they reduce your taxable income: health, dental and vision premiums; HSA and FSA contributions; traditional 401(k) or 403(b) contributions. A $200 pre-tax contribution costs you less than $200 of take-home pay, because it also cuts your tax.

Post-tax deductions come out after: Roth 401(k) contributions, wage garnishments, union dues in some cases, some life and disability insurance.

If you're weighing traditional vs. Roth contributions, this line is where the difference physically shows up.

Employer contributions

Many stubs show what your employer pays on your behalf — their half of FICA, their share of your health premium, their 401(k) match. This is not deducted from you. It's information.

It's also worth reading closely, because it's real compensation that never appears in your hourly rate. An employer paying $600 a month toward your health premium is adding roughly $3.50 an hour to what you're actually being paid.

YTD: the column people skip

Every line usually has a year-to-date figure beside it. This is the most useful column on the page and almost nobody reads it.

Use it to sanity-check the big picture: does YTD gross look right for the hours you've worked this year? Is your 401(k) on pace? Has enough tax been withheld to avoid an April surprise? A single stub is a snapshot; the YTD column is the trend.

The four things to check, every time

Hours. Do the regular and overtime hours match what you actually worked? Compare against your own records, not their timesheet.
Rate. Is your hourly rate the rate you agreed to? If it changed and you weren't told, read this.
Overtime rate. Is overtime paid at 1.5× or better — and is it calculated on your full regular rate, including nondiscretionary bonuses?
Deductions you didn't authorize. Any deduction you didn't agree to in writing is worth a same-day question to payroll. In many states, unauthorized deductions are illegal.

If you don't get a pay stub at all

Most states require employers to provide an itemized wage statement each pay period, and a handful do not. Regardless of state, you are entitled to be paid correctly — and if you have no stub, keep your own record of hours worked. Contemporaneous personal records carry real weight if an employer's records turn out to be inadequate.

General information, not tax or legal advice. Tax rates, wage caps, and state pay-stub requirements change — check IRS.gov and your state labor department for current figures. If a deduction looks wrong, ask payroll first; most errors are honest ones.