Most people glance at their pay stub and focus on one number: the amount deposited into their bank account. But a pay stub contains a lot more information — some of which can save you money if you understand it. Here is what every line on a pay stub means.
Gross Pay vs Net Pay
The two most important numbers on any pay stub are gross pay and net pay.
Gross pay is the total amount you earned before any deductions. If your salary is $60,000 per year and you are paid twice a month, your gross pay per pay period is $2,500.
Net pay is what you actually receive after all taxes and deductions are subtracted. This is the amount deposited into your account. The difference between gross and net pay is often larger than people expect — typically 20 to 35 percent of gross pay goes to taxes and other deductions.
Federal Income Tax Withholding
This is the amount withheld from your paycheck for federal income taxes. The amount depends on your income, your filing status (single, married, head of household), and any allowances or additional withholding amounts you claimed on your W-4 form.
Federal withholding is not your final tax liability. At the end of the year, you file a tax return that calculates your actual taxes owed. If too much was withheld, you get a refund. If too little was withheld, you owe additional taxes.
If you consistently get large refunds, you are withholding too much — giving the government an interest-free loan. Consider updating your W-4 to reduce withholding and increase your take-home pay now.
State Income Tax Withholding
If you live in a state with an income tax, this line shows the amount withheld for state taxes. Nine states have no income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. If you live in one of these states, this line may be blank or zero.
Social Security Tax
Also labeled OASDI (Old Age, Survivors, and Disability Insurance). In 2026, employees pay 6.2 percent of wages toward Social Security, up to a maximum wage base of $176,100. Your employer pays an additional 6.2 percent on your behalf.
Once your earnings for the year exceed the wage base, Social Security tax stops being withheld for the remainder of that year. If you earn more than $176,100, you will notice Social Security withholding stops mid-year.
Medicare Tax
The standard Medicare tax rate is 1.45 percent of all wages, with no wage cap. Your employer matches this 1.45 percent. High earners pay an additional 0.9 percent surtax on wages above $200,000 (single) or $250,000 (married filing jointly). This surtax is withheld by your employer when your wages exceed $200,000, regardless of your filing status.
401(k) or Retirement Plan Contributions
If you contribute to a workplace retirement plan like a 401(k), 403(b), or 457, the contribution amount appears as a pre-tax deduction. Pre-tax means the contribution reduces your taxable income for the year. Contributing $500 per month to a 401(k) does not reduce your take-home pay by $500 — it reduces it by $500 minus the taxes you would have paid on that amount.
Roth 401(k) contributions appear separately. These are after-tax contributions — your taxable income is not reduced, but the money grows and can be withdrawn tax-free in retirement.
Health Insurance Premiums
If your employer offers health insurance and you are enrolled, your share of the premium is deducted from each paycheck. Most employer-sponsored health insurance is deducted pre-tax through a Section 125 cafeteria plan, which reduces your taxable income.
Your pay stub may show separate lines for medical, dental, and vision premiums.
HSA and FSA Contributions
Health Savings Account (HSA) and Flexible Spending Account (FSA) contributions are deducted pre-tax. These amounts reduce your taxable income for federal, state, and FICA (Social Security and Medicare) taxes — making them more valuable than 401(k) contributions on a per-dollar basis.
Life and Disability Insurance
Many employers offer life insurance and short-term or long-term disability insurance as benefits. Employer-paid life insurance up to $50,000 in coverage is tax-free. If your employer provides more than $50,000, the imputed cost of the excess coverage appears as taxable income on your pay stub, often labeled “GTL” (Group Term Life).
Year-to-Date Totals
Your pay stub should show year-to-date (YTD) totals for each category. These show the cumulative amounts since January 1 of the current year. Review these at the end of the year and make sure they match your W-2 when it arrives. Any discrepancy should be investigated with your HR department.
What to Check on Every Pay Stub
- Confirm gross pay matches your salary or hourly rate times hours worked.
- Verify all deductions you signed up for are being taken correctly.
- Check that no deductions appear that you did not authorize.
- Monitor year-to-date totals to ensure accuracy over the course of the year.
- After any benefits change (open enrollment, life event), verify the new amounts appear correctly on the following paycheck.