Basics · Updated April 2026
How to Read a Paystub — Every Line Explained
US paystubs are a wall of acronyms that mostly boil down to three sections: what you earned, what got taken out, and what you're taking home. Here's what every line means.
The three sections every paystub has
Regardless of your payroll provider — ADP, Gusto, Workday, Paychex, Rippling, QuickBooks — every US paystub has the same three sections, possibly with different labels:
- Earnings — your gross pay, broken out by type (regular, overtime, bonus, PTO, etc.)
- Deductions — everything subtracted, split into pre-tax, taxes, and post-tax
- Net pay — gross minus all deductions; the number that actually arrives
Earnings section
You'll usually see at least these rows:
- Regular — hourly × hours worked, or salary ÷ pay periods.
- Overtime — hours over 40/week at 1.5× the regular rate (federal FLSA; some states have stricter rules).
- Holiday / PTO / Sick — paid time off categorized so HR can track balances.
- Bonus / Commission — taxed at a flat 22% federal rate by default when paid separately (the "supplemental" rate), which is why bonuses often feel under-withheld.
- Imputed income — non-cash benefits like group-term life insurance over $50K. Added to gross for tax calculation, subtracted back out.
Deductions — pre-tax (before income tax is calculated)
Pre-tax deductions come out of your gross before federal and state income taxes are calculated. That means every dollar you put in saves you your marginal tax rate in income tax — up to 37% federal for high earners, plus whatever your state charges.
- 401(k) / 403(b) traditional — retirement. Reduces federal + state taxable income (but not FICA).
- 401(k) Roth — taxed now, not pre-tax. Shows up here but doesn't reduce your taxable income.
- HSA / FSA — health-savings / flexible-spending accounts. Reduces federal, state, and FICA. The only deduction that dodges FICA.
- Medical / Dental / Vision premiums — when paid through a Section 125 cafeteria plan (standard at almost all employers), these reduce federal, state, and FICA.
- Commuter / Transit — up to $325/month in 2026 can go pre-tax.
Taxes
- Federal Income Tax (aka "FIT" or "Fed Inc Tax") — withheld based on your W-4 using IRS Publication 15-T tables. Adjust it anytime by submitting a new W-4 to payroll.
- FICA-SS / OASDI / Social Security Tax — 6.2% on wages up to $184,500 in 2026.
- FICA-Med / Medicare Tax — 1.45% on all wages; extra 0.9% above $200K (employer adds this automatically once you cross it YTD).
- State Income Tax — your state's rate on wages. Zero in nine states.
- Local Tax / City Tax / County Tax — only in some states (NYC, Philadelphia, most Maryland counties, several Ohio/Indiana/Michigan cities).
- State Disability / State Unemployment — California (SDI), New York (SDI), New Jersey (SDI + SUI), Hawaii, Puerto Rico, Rhode Island. Usually a fraction of a percent.
Deductions — post-tax
Post-tax deductions come out after income tax runs, so they don't reduce your tax bill. Still useful, just not tax-advantaged.
- Roth 401(k) — shown with pre-tax contributions but taxed now (that's the trade-off: no deduction today, tax-free withdrawal in retirement).
- Disability insurance (voluntary) — paying premiums post-tax means benefits are tax-free if you claim.
- Life insurance — supplemental voluntary coverage above the employer-paid base.
- Union dues
- Garnishments — child support, tax levies, creditor judgments.
- Charitable contributions — if your employer offers payroll-deduct giving.
The YTD column
Every row has two numbers: current period and year-to-date. The YTD column is how you verify your paystub matches your W-2 at the end of the year. Before your employer cuts the W-2 in January, your last paystub of the year should show:
- YTD Gross = Box 1 of W-2 (approximately — after subtracting pre-tax 401(k), HSA, etc.)
- YTD Federal Income Tax = Box 2
- YTD Social Security Tax = Box 4 (and Social Security Wages = Box 3)
- YTD Medicare Tax = Box 6 (and Medicare Wages = Box 5)
- YTD State Income Tax = Box 17 (and State Wages = Box 16)
If they don't match, call payroll before the W-2 goes out.
Net pay
Net pay = gross earnings − all deductions. This is the number that hits your bank account. On a typical $75,000 salary in a state with a 5% income tax, expect ~$54,000 net per year (about $2,080 biweekly), which works out to roughly 72% of gross.
Check if your withholding is right
Our paycheck calculator models federal, state, and FICA using 2026 rules. If the net it shows doesn't match your paystub within a few dollars, there's probably a W-4 adjustment worth making before you end up over- or under-withheld at tax time.
Common confusions, cleared up
"Why is my bonus under-withheld?" Bonuses paid separately are withheld at a flat federal 22% (supplemental rate). If your marginal rate is higher than 22%, you'll owe more at tax time unless you bump up withholding on your regular paychecks to compensate.
"Why did my Social Security deduction stop mid-year?" You hit the $184,500 wage cap. Social Security tax drops to $0 for the rest of the year — Medicare keeps going because it has no cap.
"Why does my gross for tax purposes differ from my earnings total?" Pre-tax deductions (401k, HSA, medical premiums) shrink taxable gross. "Medicare Wages" in Box 5 of your W-2 is usually higher than "Wages" in Box 1 because 401(k) reduces Box 1 but not Box 5 (only HSA reduces both).