How to Read a Pay Stub: Every Line Explained With an Example

Short answer: to read a pay stub, start at the top with gross pay (what you earned), subtract pre-tax deductions such as retirement and health premiums, then taxes (federal, state, Social Security and Medicare), and the number left is net pay, the money that reaches your bank. The year-to-date column adds up every pay period so far, so you can check the totals against your own records.

Key takeaways

• Gross pay minus deductions and taxes equals net pay. Every stub follows that order.
• Pre-tax deductions lower the wages your income tax is figured on, but a 401(k) deferral does not lower Social Security and Medicare tax.
• Federal withholding is an estimate set by your W-4, not your final tax bill.
• Check the year-to-date column and your employer match every few months. Errors are easier to fix early.

What does each section of a pay stub mean?

Layouts differ between payroll companies, but nearly every stub has the same five parts.

• Pay period and pay date. The dates the pay covers and the day it is paid.
• Earnings. Regular hours or salary, overtime, bonuses and commissions. The total is gross pay.
• Deductions. Money taken out for benefits and savings. These split into pre-tax and post-tax.
• Taxes. Federal income tax, state and local tax where they apply, Social Security and Medicare.
• Net pay and year-to-date (YTD). What you receive now, and the running totals since January 1.

What does a real pay stub look like?

Here is one pay period for someone paid $65,000 a year every two weeks (26 pay periods), which is $2,500 gross. The tax withholding figures are made up to show the layout. Yours depend on your W-4 and your state.

Two details trip people up. First, income tax is figured on $2,250 (gross minus the 401(k) and the health premium), but Social Security and Medicare are figured on $2,400, because a 401(k) deferral is still subject to those payroll taxes while a health premium taken pre-tax is not. Second, the $150 going to the 401(k) is not lost. It is your money, moved into your own retirement account.

What is the difference between pre-tax and post-tax deductions?

Pre-tax deductions come out before income tax is figured, so they lower your taxable income. Common ones are a traditional 401(k), health, dental and vision premiums, and contributions to a health savings account or flexible spending account. Post-tax deductions come out after taxes. Examples are Roth 401(k) contributions, union dues and wage garnishments. They do not lower your tax now, but a Roth contribution can be withdrawn tax-free later under the account rules.

Why is my paycheck smaller than I expected?

Most people are surprised by the gap between gross and net pay. In the example, $723.60 of the $2,500 (28.9%) went to taxes, benefits and retirement. The usual causes of a bigger gap than you expected are:

• Withholding set too high. A W-4 filled in with outdated details can take more than needed. The IRS has a free Tax Withholding Estimator on IRS.gov.
• A new benefit. Open enrollment changes show up as a bigger health premium.
• A bonus or raise. More income can push withholding up. See what to do with a windfall or bonus.
• A different pay schedule. Biweekly pay has 26 checks a year, so two months have three checks, which can feel like a raise if you budget monthly.

What can you check on every stub?

1. Hours or salary. Does gross pay match your rate and hours worked, including overtime?
2. Retirement contribution. Is the percentage what you chose? Is the employer match showing? In the example, a 3% match is $75 a period, or $750 after 10 periods.
3. Benefit deductions. Do the premiums match your enrollment?
4. Year-to-date totals. After 10 periods the example shows $25,000 gross and $1,500 in 401(k) savings. Compare them with your W-2 each January.
5. Name, address and tax ID. A wrong detail can cause trouble at tax time.

If something looks off, ask your payroll or HR team early. Fixes are simpler within the same year.

How does your pay stub connect to your plan?

The stub is the cleanest record of your real income. Use net pay, not gross, to build a budget: see how to make a budget. The retirement line is where a 401(k) and its match start working for you, and the savings line is how you reach your monthly savings number. If your stub shows nothing going to savings, paying yourself first is the habit to add.

Sources and further reading: the IRS explains withholding and the W-4, and the Consumer Financial Protection Bureau has free money-management guides.

General education, not tax or financial advice. Reviewed October 2026. The example uses made-up federal and state withholding amounts, and the 2026 Social Security and Medicare rates of 6.2% and 1.45%. Your stub will differ.

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