How to Read Your Pay Stub: Every Line Explained

5 min read · April 2025

Most people glance at the bottom number on their pay stub — the amount deposited — and ignore everything else. That's understandable, but those other lines tell the full story of where your money goes. Understanding your pay stub gives you the power to catch errors, plan your budget better, and make smarter financial decisions.

Here's a plain-English breakdown of every section you'll see on a typical pay stub.

Gross Pay

This is the starting point — your total earnings before anything is taken out. If you're salaried at $60,000 per year and paid bi-weekly, your gross pay per check is $2,307.69. If you're hourly, it's your rate multiplied by hours worked. This number is always higher than what hits your bank account.

Federal Income Tax Withheld

The federal government takes a percentage of your income based on your tax bracket and the information you provided on your W-4. The more you earn, the higher the percentage. This is the biggest deduction for most workers and is based on 2025 IRS tax tables.

State Income Tax Withheld

If you live in a state with income tax, this line shows what your state takes. Rates vary widely — from under 3% in some states to nearly 10% in others. Nine states have no state income tax at all, so this line may be blank or zero if you live in one of them.

Social Security Tax

This is part of FICA — 6.2% of your gross wages up to $176,100 for 2025. It funds the Social Security retirement and disability program. Both you and your employer pay this — your employer matches your 6.2%.

Medicare Tax

Also part of FICA — 1.45% of all your earnings with no cap. Higher earners (above $200,000) pay an additional 0.9%. Like Social Security, your employer matches this as well.

Pre-Tax Deductions

If you contribute to a 401(k), HSA, FSA, or pay certain health insurance premiums through your employer, these come out before taxes are calculated. That means they reduce your taxable income — which is actually a good thing. A $200 401(k) contribution doesn't reduce your take-home by $200; it reduces it by less because you're also paying less in taxes.

Post-Tax Deductions

Some deductions come out after taxes — like Roth 401(k) contributions, certain insurance premiums, or wage garnishments. These don't reduce your taxable income.

Net Pay

This is the bottom line — what actually gets deposited into your account. Gross pay minus all taxes and deductions equals net pay. This is your real take-home pay.

Year-to-Date (YTD) Totals

Most pay stubs include a YTD column that shows cumulative totals since January 1st. This is useful for tracking how much you've earned and paid in taxes throughout the year, and for verifying your W-2 at tax time.