What every line on your pay stub means
Most people look at the net pay number and ignore everything above it. But your pay stub is a map of exactly where your money goes before it reaches your account. Understanding it means you can catch errors, optimize your W-4 withholding, and understand what your benefits are actually costing you.
Gross pay
Your gross pay is your total pay before anything is taken out. This is what your salary or hourly rate actually produces.
If you earn $60,000/year and are paid bi-weekly (26 pay periods), your gross pay per check is $60,000 ÷ 26 = $2,307.69.
This is the number used to calculate most deductions.
Pre-tax deductions
These come out before taxes are calculated, which means they reduce your taxable income.
401k / 403b / 457: Retirement contributions. If you're contributing 6% of $60,000, that's $3,600/year, or $138.46 per bi-weekly check.
Health insurance premiums: Your portion of your employer health plan. Your employer typically pays a larger share; you pay the rest pre-tax.
HSA (Health Savings Account): Contributions through payroll are pre-tax and bypass even FICA taxes (special advantage over IRA/401k).
FSA (Flexible Spending Account): Healthcare or dependent care FSA contributions are pre-tax.
Dental / vision / life insurance premiums: Usually pre-tax through employer plans.
Effect of pre-tax deductions: If you contribute $500/month in pre-tax benefits (health insurance + 401k), you're only taxed on the remaining income. At a 22% marginal rate, you save ~$110/month in taxes just from this.
FICA taxes
FICA (Federal Insurance Contributions Act) funds Social Security and Medicare. These are not optional.
Social Security: 6.2% of gross wages up to the annual wage base ($184,500 in 2026; it rises most years). Your employer matches this 6.2%.
Medicare: 1.45% of all wages, no cap. Employer matches 1.45%. If you earn over $200,000 ($250,000 married filing jointly), an additional 0.9% applies to earnings above that threshold.
Total FICA on $2,307 bi-weekly check:
- Social Security: $2,307 × 6.2% = $143.03
- Medicare: $2,307 × 1.45% = $33.45
- Total: $176.48
FICA is calculated on gross wages before most pre-tax deductions (exception: HSA and Section 125 plans).
Federal income tax withholding
The amount withheld depends on:
- Your gross wages (after pre-tax deductions)
- Your W-4 elections (filing status, additional withholding, credits claimed)
- The IRS withholding tables
This is estimated — the IRS will reconcile when you file your return. Too much withheld = refund. Too little = you owe.
Control this with your W-4. If you consistently get large refunds, you're giving the government an interest-free loan. Adjust your W-4 with HR to reduce withholding and increase take-home pay.
State income tax withholding
Nine states have no tax on wages: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. (Washington does tax some large capital gains, but not paychecks.) Everyone else has state withholding calculated similarly to federal — based on your state's tables and your state W-4 elections.
Post-tax deductions
These come out after taxes are calculated — they don't reduce your tax burden.
Roth 401k contributions: Unlike traditional 401k, Roth is post-tax.
Supplemental life or disability insurance you choose to buy through work is often taken after tax.
Imputed income isn't a deduction but shows up here too: if your employer pays for more than $50,000 of life insurance coverage, the IRS treats the cost of the extra coverage as taxable income, so it's added to your taxable wages.
Wage garnishments: Court-ordered deductions for child support, debt repayment, student loans in default. If you have one you don't recognize, address it immediately.
Year-to-date columns
Most stubs show both the current period and year-to-date totals. The YTD columns are useful for:
- Verifying your annual earnings
- Tracking how close you are to the Social Security wage base (after which that 6.2% stops)
- Confirming your 401k contributions match your elections
- Checking that employer matches appear
Common errors to look for
- Wrong gross pay: Verify your hourly rate × hours, or salary ÷ pay periods matches
- Incorrect health insurance deduction: Premiums sometimes change in January or with life events and the wrong amount is deducted for a period
- Missing 401k match: If your employer match isn't appearing in your contributions, investigate
- Old W-4 elections: If you haven't updated your W-4 after major life changes (marriage, child, second job), your withholding may be significantly off
Quick reference
- Gross pay: Full wages before deductions
- Pre-tax deductions: 401k, health/dental/vision premiums, HSA, FSA — reduce taxable income
- FICA: 6.2% Social Security + 1.45% Medicare — mandatory, employer matches
- Federal/state withholding: Estimated income tax — control via your W-4
- Post-tax deductions: Roth 401k, some benefits — don't reduce taxable income
- Check YTD columns to catch errors accumulating over the year