Your pay stub is a mini financial report about your compensation — and most of the information on it is useful. Here’s a line-by-line guide to everything you’ll typically see.

The basic structure

Every pay stub has three main sections:

  1. Earnings — what you earned before any deductions
  2. Deductions — what was taken out (taxes + voluntary items)
  3. Net pay — what actually hit your bank account

There’s usually also a “Year-to-Date” (YTD) column showing cumulative totals for the year.

Earnings section

Regular Pay / Base Salary: Your standard earnings. For salaried employees, this is your annual salary ÷ number of pay periods. For hourly employees, it’s hours × hourly rate.

Overtime: Hours above 40 per week, typically paid at 1.5× your regular rate (per FLSA in the US). Some employers have different policies.

Commission / Bonus: Variable compensation earned on top of base pay.

Holiday / PTO Pay: Paid time off typically appears as a separate line or is included in regular pay depending on your employer.

Deductions section

Mandatory (taxes)

Federal Income Tax (FIT): Withheld based on your W-4 form. The amount depends on your filing status, claimed allowances, and gross pay.

Social Security Tax (OASDI): 6.2% of your gross wages (up to the annual wage base — $168,600 in 2025). Your employer pays a matching 6.2%.

Medicare Tax: 1.45% of all wages. An additional 0.9% applies to earnings above $200,000/year for single filers ($250,000 for joint). No wage cap.

State Income Tax: Varies by state. Nine states have no income tax (including Texas, Florida, Nevada). Others range from 1% to 13%+.

Local / City Tax: Some cities (Philadelphia, New York City, San Francisco) have additional local income taxes.

Voluntary (benefits)

Health Insurance Premium: Your share of the employer-sponsored health plan. Often pre-tax (reduces taxable income), which is a meaningful benefit.

Dental / Vision Insurance: Similar to health — your share of the premium.

401(k) / 403(b) Contribution: Your retirement contribution. If pre-tax, it reduces your federal taxable income today. Roth 401(k) contributions are post-tax and don’t appear as a deduction from gross taxable income.

HSA (Health Savings Account): Contributions to a health savings account linked to a high-deductible health plan. Pre-tax, reduces taxable income.

FSA (Flexible Spending Account): Similar to HSA but use-it-or-lose-it; for medical or dependent care expenses.

Life / Disability Insurance: Your portion of voluntary insurance premiums.

Garnishments: Court-ordered deductions for child support, alimony, or debt repayment.

What “pre-tax” vs. “post-tax” means

Many benefit deductions are pre-tax, meaning they’re subtracted from your gross pay before taxes are calculated. This reduces your taxable income, so you save money on taxes.

Example: $500/month pre-tax 401(k) contribution at 22% marginal rate saves $110/month in federal taxes — essentially the government is subsidising 22% of your retirement savings.

Post-tax deductions (like Roth 401(k)) come out after taxes. You don’t get the immediate tax break, but withdrawals are tax-free in retirement.

Checking your pay stub for errors

Payroll errors happen. Check:

  • Is your rate of pay correct?
  • Are hours correctly recorded?
  • Is your tax withholding what you expect? (If you got a huge refund or owed a lot last year, update your W-4)
  • Are benefits deductions at the right amounts?
  • Has a pay raise been correctly applied?

If you find an error, contact your HR or payroll department immediately. Most companies can issue corrections within the next pay cycle.

The year-to-date column

The YTD totals help you track:

  • Total taxes paid — useful for tax planning and verifying your W-2 at year-end
  • Social Security YTD — when you reach the wage cap ($168,600 in 2025), deductions stop for the rest of the year
  • Total 401(k) contributions — compare against the annual limit ($23,500 in 2025)

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