How to Read Your Pay Stub: A Complete Guide

Gross Pay: Your Starting Point

Gross pay is your total earnings before any deductions. For salaried employees, it's your annual salary divided by the number of pay periods:

• Weekly payroll (52 periods): $60,000 ÷ 52 = $1,153.85 per paycheck
• Bi-weekly payroll (26 periods): $60,000 ÷ 26 = $2,307.69 per paycheck
• Semi-monthly payroll (24 periods): $60,000 ÷ 24 = $2,500 per paycheck
• Monthly payroll (12 periods): $60,000 ÷ 12 = $5,000 per paycheck

For hourly workers, gross pay is hours worked multiplied by your hourly rate, plus any overtime (which is required by federal law to be at least 1.5× your regular rate for hours over 40 per week).

Federal Income Tax Withholding

Federal income tax is typically the largest line item after gross pay. The amount withheld depends on three things:

1. Your filing status — Single, Married Filing Jointly, or Head of Household. Married filers have lower withholding tables, so if you're single filing as "Married," you may owe at tax time.
2. Your W-4 elections — The updated W-4 (used since 2020) asks about multiple jobs, dependents, and additional withholding instead of allowances. More deductions claimed = less withheld.
3. Your pay frequency — The IRS withholding tables are applied per paycheck, not annually. A monthly paycheck has a different withholding rate than a weekly one for the same annual salary.

For a single filer earning $75,000 in 2026 with no adjustments, expect roughly $9,000–$10,000 in total federal income tax withheld over the year — about $346–$385 per bi-weekly paycheck.

Social Security (OASDI)

Social Security is withheld at exactly 6.2% of your gross wages, up to the annual wage base cap. For 2026, that cap is $184,500. Once your year-to-date earnings hit $184,500, no more Social Security is withheld for the rest of the year.

Your pay stub may label this as "OASDI" (Old-Age, Survivors, and Disability Insurance), "Social Security," or "SS Tax." The math is always 6.2% × gross pay for that period.

Important if you work multiple jobs: Each employer withholds Social Security independently without knowing about your other jobs. If your combined income exceeds $184,500, you may have excess Social Security withheld across employers. You can claim a refund for the excess on your federal tax return.

Medicare

Medicare is withheld at 1.45% of all gross wages with no cap. Unlike Social Security, it never stops for the year regardless of how much you earn.

High earners (over $200,000 if single, $250,000 if married filing jointly) also pay an additional 0.9% Additional Medicare Tax. Your employer starts withholding this once your pay from them exceeds $200,000, regardless of your filing status. If you and your spouse's combined income triggers the threshold but neither employer withheld enough, you may owe the difference when you file.

State Income Tax

State income tax withholding appears as a separate line and varies dramatically based on where you work. Nine states have no income tax at all: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. California's top rate is 13.3%. Most states fall between 3–6% for middle-income earners.

Some states (and many cities) also have their own withholding forms — similar to the federal W-4 — that you complete when you start a job. If you moved mid-year or work in a different state than you live, your withholding situation may be more complex. Check your state's revenue department website for the correct form.

Pre-Tax Deductions

These reduce your taxable gross pay before federal and state income taxes are calculated, which means they save you money on taxes:

• 401(k) / 403(b) contributions — Traditional (pre-tax) contributions reduce your taxable income now. In 2026, the employee contribution limit is $23,500 (plus $7,500 catch-up if you're 50+).
• Health insurance premiums — Employer-sponsored health insurance premiums paid through payroll deduction are pre-tax under a Section 125 cafeteria plan.
• FSA / HSA contributions — Flexible Spending Account and Health Savings Account contributions are pre-tax and reduce your taxable income.
• Dental and vision premiums — Usually pre-tax if part of a Section 125 plan.

Roth 401(k) contributions are the exception — they're made after-tax, so they don't reduce your current taxable income but grow tax-free.

After-Tax Deductions

These come out after taxes are calculated and don't reduce your taxable income:

• Roth 401(k) contributions
• Life insurance premiums (above the tax-exempt limit)
• Garnishments (court-ordered deductions)
• Union dues (in some cases)

Net Pay: What You Actually Keep

Net pay = gross pay − all the lines above. If your net seems unexpectedly low, work through each deduction line by line. Common culprits:

• A filing status mismatch on your W-4
• A large 401(k) contribution you forgot you elected during open enrollment
• Additional withholding you requested on a prior W-4
• Supplemental wages (bonus, commission) withheld at the 22% federal flat rate

Year-to-Date Totals

Most pay stubs show both current period amounts and year-to-date (YTD) totals. YTD totals are useful for:

• Verifying you'll hit your 401(k) contribution goal by year-end
• Tracking when you'll hit the Social Security wage cap
• Estimating your total annual withholding before you file your return

Want to check if your withholding is on track? Use the Pay-Breakdown paycheck calculator to estimate your full-year tax liability, then compare it to your YTD withholding. If you're behind, filing a new W-4 requesting additional withholding can prevent a tax bill next April.