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How to Read a US Paycheck Stub: Gross Pay, Net Pay, and Deductions

A US pay stub packs a lot of information into a small space. Here is what each line generally means.

Gross pay: your total earnings before anything is taken out

Gross pay is your full earnings for the pay period β€” hourly wages times hours worked, or a portion of an annual salary β€” before any taxes or deductions are subtracted. It is the number often quoted when discussing salary, but it is not what actually lands in your bank account.

Net pay: what you actually take home

Net pay, sometimes called "take-home pay," is gross pay minus all taxes and deductions. This is the amount that is actually deposited into your bank account or handed to you as a paycheck.

Federal income tax withholding

Employers withhold an estimated amount of federal income tax from each paycheck based on the information you provided on Form W-4, such as filing status and number of dependents. This is a prepayment toward your actual tax bill, reconciled when you file your annual tax return.

State and local income tax withholding

Most states with an income tax also withhold a portion from each paycheck, and some cities or counties add their own local income tax withholding on top. A handful of states have no state income tax at all, so this line does not appear on every pay stub.

FICA: Social Security tax (6.2%)

Social Security tax is withheld at a flat 6.2% of wages up to an annual wage base, which is $184,500 for 2026 according to the IRS; wages above that amount in the year are not subject to more Social Security tax. Your employer pays a matching 6.2% separately, which does not come out of your paycheck.

FICA: Medicare tax (1.45%, or more at higher incomes)

Medicare tax is withheld at 1.45% of all wages with no wage base limit. Employers also withhold an Additional Medicare Tax of 0.9% on wages above $200,000 in a calendar year, regardless of filing status; your actual liability is settled on your tax return, where the threshold depends on filing status. The employer does not match this extra 0.9%.

Pretax deductions

Contributions to things like a traditional 401(k), a Health Savings Account (HSA), or employer health insurance premiums are often deducted before taxes are calculated, which lowers your taxable income and, in turn, your tax withholding for that pay period.

Post-tax deductions

Some deductions, such as Roth 401(k) contributions or certain benefit elections, are taken out after taxes are already calculated, so they reduce your take-home pay without lowering your taxable income.

Year-to-date (YTD) totals

Most pay stubs include a running year-to-date column next to each line item, showing the cumulative total for the calendar year so far. This is useful for tracking progress toward limits like the Social Security wage base or a 401(k) contribution limit.

Hours, rate and overtime lines

Hourly workers usually see a line for regular hours with the hourly rate, plus separate lines for overtime, holiday pay or shift differentials. Check that the hours match your own record. Under federal law, covered non-exempt employees must receive at least one and a half times their regular rate for hours over 40 in a workweek, and some states add daily overtime rules.

Pay periods change the size of each check

Weekly, biweekly, semi-monthly and monthly schedules are all common. A biweekly schedule produces 26 checks a year, while semi-monthly produces 24, so a salary of $60,000 gives about $2,307.69 gross per biweekly check but exactly $2,500 per semi-monthly check. Comparing a biweekly stub with a semi-monthly stub without adjusting for this causes frequent confusion.

A simplified example from gross to net

Imagine $2,000 gross for a pay period. Social Security at 6.2% is $124 and Medicare at 1.45% is $29, together $153. If $100 goes to a pretax health premium and $100 to a traditional 401(k), income taxes are figured on a lower base. Federal and state withholding then depend on your W-4 and state rules, so they vary widely. The point is the order: gross, minus pretax items, minus taxes, minus post-tax items, equals net.

Employer-paid items you may see listed

Some stubs show an employer contribution to a 401(k) match, an employer share of health insurance, or imputed income for things like group-term life insurance over a threshold. These lines are informational and usually do not reduce your take-home pay, but imputed income can raise your taxable wages.

Wage garnishments and other court-ordered deductions

If a court or agency orders a garnishment, for example for child support, unpaid taxes or a judgment, the employer withholds it from your pay and sends it on. Federal and state laws limit how much can be taken, and the stub will usually show it as its own line.

Why your raise never fully shows up in take-home pay

A salary increase raises gross pay, but taxes and any percentage-based deductions, like a 401(k) contribution set as a percent of salary, scale up along with it. That is part of why a raise on paper often translates into a smaller-than-expected bump in the actual deposit that hits your bank account.

A pay stub is not the same as a tax return

Withholding on a pay stub is only an estimate of what you will owe for the year, based on the information on your W-4 and assumptions about your income staying steady. Your actual tax liability is settled when you file your annual tax return, which is why some people get a refund and others owe additional tax despite having taxes withheld all year.

What to check on every stub

Compare the hours or salary figure with what you agreed to. Confirm that the name, address and the last digits of your tax ID are correct, since mistakes carry over into your W-2. Look at whether pretax items such as health premiums and retirement contributions match your benefit elections. Watch the YTD column for Social Security tax stopping once you pass the wage base, which explains why high earners see a larger paycheck late in the year. If something looks wrong, ask payroll in writing and keep a copy of the stub.

How W-4 choices change your paycheck

The Form W-4 asks for filing status, whether you hold multiple jobs or a working spouse, credits for dependents, other income, deductions and any extra amount you want withheld per period. Under-withholding can lead to a bill at filing time and sometimes an underpayment penalty, while over-withholding is effectively an interest-free loan to the government that comes back as a refund. The IRS provides a Tax Withholding Estimator on irs.gov for checking your numbers. This is general information, not tax advice for your situation.

Frequently Asked Questions

Why does my pay stub show more deductions than just taxes?

Beyond federal and state taxes and FICA, a stub often lists voluntary deductions you elected, such as health insurance premiums, retirement plan contributions, life insurance, or union dues, each shown as its own line so you can see exactly where your gross pay goes.

What is the difference between a W-2 and a pay stub?

A pay stub summarizes a single pay period, while a W-2 is an annual tax form your employer issues after year-end, summarizing your total wages and total taxes withheld for the entire year, which you use to file your tax return.

Can I change how much federal tax is withheld from my paycheck?

Yes. Submitting an updated Form W-4 to your employer lets you adjust your withholding, for example to account for a second job, additional dependents, or a preference for a larger refund versus more take-home pay throughout the year.

Why is my net pay different from one paycheck to the next?

Common reasons include a different number of hours or overtime, a bonus taxed at a different withholding method, a benefit deduction that happens only in certain periods, and the Social Security wage base being reached late in the year. Comparing the line-by-line differences between the two stubs usually reveals the cause.

Why was my bonus taxed so heavily?

Employers often withhold federal tax on supplemental wages such as bonuses using a flat percentage method or by combining them with regular pay. That is only withholding, not your final tax. The actual tax on the bonus is determined when you file your return, and you may get part of the withholding back as a refund.