You’ve been getting paid for years. Maybe decades. And there’s a decent chance you’ve never actually read your pay stub line by line. You’re not alone — most people glance at the net deposit, confirm the number looks roughly right, and move on. That’s a mistake. Your pay stub is the single most detailed financial document you receive on a regular basis, and buried in those rows of numbers are deductions that directly affect your taxes, your retirement, and your take-home pay. If something’s wrong, you’re the only person who’s going to catch it.

Payroll errors aren’t rare, either. The Department of Labor recovers hundreds of millions of dollars in back wages every year from employers who underpaid workers. Some of those errors are intentional. Many aren’t. Either way, the fix starts with knowing how to read what’s on the page.

Here’s a section-by-section breakdown so you know exactly where your money goes every pay period.

Gross Pay vs. Net Pay: Where Your Money Starts and Where It Ends

The two most prominent numbers on any pay stub are your gross pay and your net pay. Gross pay is the total amount you earned before anything gets taken out. If you’re salaried, it’s your annual salary divided by the number of pay periods per year. If you’re hourly, it’s your hours worked multiplied by your hourly rate, plus any overtime, holiday pay, or shift differentials.

Net pay — sometimes labeled “take-home pay” — is what actually hits your bank account. It’s your gross pay minus every federal, state, and local tax, plus every deduction for insurance, retirement, and anything else your employer withholds. The gap between gross and net can be jarring if you’ve never examined it. For a single filer earning $60,000 a year with standard deductions, you might see 25-30% of your gross pay disappear before it reaches you.

Your pay stub should also show your pay rate, your pay period (the dates covered by this paycheck), and your pay date. If you’re hourly, look for a breakdown of regular hours vs. overtime hours. Under the Fair Labor Standards Act, non-exempt employees must receive at least 1.5 times their regular rate for hours worked beyond 40 in a workweek. If you worked 45 hours and your stub shows only 40, that’s a red flag.

One thing to watch: if you’re paid biweekly (every two weeks), you’ll receive 26 paychecks per year, not 24. Two months each year will have three paydays instead of two. Your gross pay per check stays the same, but your monthly income fluctuates slightly. Don’t confuse biweekly with semi-monthly — semi-monthly means twice per month on fixed dates, which gives you exactly 24 paychecks.

Federal, State, and Local Taxes: The Government’s Cut

This is where the bulk of your deductions live, and it’s the section most people find confusing.

Federal income tax is the biggest single tax deduction for most workers. The amount withheld depends on the information you provided on your W-4 form, which tells your employer how to calculate withholding. The IRS updated the W-4 in 2020 to eliminate allowances and instead use a system based on filing status, dependents, and other income. If you haven’t updated your W-4 in a while, your withholding might be off — meaning you’ll either owe money at tax time or get an oversized refund, which just means you gave the government an interest-free loan all year.

You can check whether your withholding is on track using the IRS Tax Withholding Estimator. It takes about 15 minutes and can save you a nasty surprise in April.

State income tax varies wildly depending on where you live. Nine states — including Texas, Florida, and Washington — don’t levy a state income tax at all, according to data tracked by the Tax Foundation. If you live in California or New York, you’re looking at rates that can exceed 10% at higher income levels. Your pay stub will show the state withholding amount, and it’s calculated similarly to federal withholding based on your state’s own version of the W-4.

Local taxes apply in certain cities and municipalities. If you work in New York City, Philadelphia, or parts of Ohio, you’re likely paying a local income tax or occupational privilege tax on top of everything else. These are usually smaller — often under 2% — but they add up over 26 pay periods.

Your employer withholds estimated amounts throughout the year. The actual tax you owe gets calculated when you file your return. Withholding is an approximation. If your life circumstances change mid-year — you get married, have a kid, pick up a second job, or your spouse starts working — your withholding should change too. The IRS doesn’t automatically know about those changes. You have to tell your employer by submitting a new W-4.

FICA: Social Security and Medicare Taxes

FICA stands for the Federal Insurance Contributions Act, and it funds two things: Social Security and Medicare. Unlike income tax, FICA isn’t based on filing status or deductions. It’s a flat percentage of your gross pay, and everyone pays it.

The Social Security Administration sets the rates each year. For 2026, you pay 6.2% of your wages toward Social Security, up to the wage base limit of $176,100. Once your year-to-date earnings exceed that cap, Social Security tax stops being withheld for the rest of the year. Your employer matches the 6.2%, so the total Social Security contribution on your wages is 12.4%.

Medicare tax is 1.45% of all wages with no cap. Your employer matches that too. If you earn more than $200,000 as a single filer (or $250,000 if married filing jointly), an additional 0.9% Medicare surtax kicks in — and your employer doesn’t match that extra portion. The IRS provides details on the Additional Medicare Tax if you think you might be subject to it.

On your pay stub, FICA usually appears as two separate line items: one for Social Security (sometimes labeled OASDI) and one for Medicare. Together, they’ll eat 7.65% of your gross pay for most workers. That’s not optional, and there’s no way to adjust it. Self-employed workers pay both halves — the full 15.3% — which is why freelancers often have a rude awakening at tax time.

One error to watch for: if you switch employers mid-year, each new employer starts your Social Security wage base counter at zero. That means if you earned $100,000 at your first job and $90,000 at your second, you’ll have had Social Security tax withheld on $190,000 — $13,900 more than the $176,100 cap. The overpayment gets refunded when you file your tax return, but you need to catch it. According to BLS data on job tenure, the median employee tenure is about four years, meaning job switches are common enough that this scenario comes up regularly.

Pre-Tax and Post-Tax Deductions: Where the Rest Goes

After taxes, your pay stub lists other deductions. These fall into two categories, and the distinction matters more than you’d think.

Pre-tax deductions come out of your pay before taxes are calculated, which means they reduce your taxable income. The most common ones include your 401(k) or 403(b) retirement contributions, health insurance premiums, Health Savings Account (HSA) contributions, Flexible Spending Account (FSA) contributions, and commuter benefits. If you contribute $500 per paycheck to your 401(k), that $500 gets subtracted from your gross pay before federal income tax is calculated. You’re not paying income tax on that money now — you’ll pay it later when you withdraw from the account in retirement.

Your health insurance premium is typically the largest pre-tax deduction after retirement contributions. If your employer offers a group plan, your share of the monthly premium gets split across your pay periods. The premium amount depends on your coverage level — individual, employee-plus-spouse, or family — and whether you chose an HMO, PPO, or high-deductible plan. Keep an eye on this during open enrollment season. Premiums tend to go up annually, and your employer doesn’t always absorb the full increase.

HSA contributions are another pre-tax gem if you’re enrolled in a high-deductible health plan. The money goes in tax-free, grows tax-free, and comes out tax-free when used for qualified medical expenses. The IRS sets annual HSA contribution limits, and for 2026, the self-only limit is $4,300 and the family limit is $8,550. If your employer contributes to your HSA, their contribution counts toward that cap.

Post-tax deductions come out after taxes are calculated, so they don’t reduce your taxable income. These include Roth 401(k) contributions, union dues, wage garnishments (like child support or student loan garnishments ordered by a court), life insurance premiums beyond a certain employer-provided threshold, and disability insurance in some states. Roth contributions deserve a special mention: you pay taxes on the money now, but qualified withdrawals in retirement are completely tax-free. Whether that’s a better deal than traditional pre-tax contributions depends on whether you think your tax rate will be higher or lower in retirement.

Finally, check your year-to-date (YTD) totals. These appear as a running cumulative total on most pay stubs, showing how much you’ve earned and how much has been withheld in each category since January 1. Your YTD federal tax withholding should roughly match what you’ll owe when you file. Your YTD Social Security wages should stop accruing once you hit the wage base limit. And your YTD 401(k) contributions should stay within the annual IRS limit — $23,500 for 2026, or $31,000 if you’re 50 or older.

If any number on your pay stub looks wrong — an extra deduction you didn’t authorize, a missing overtime payment, a tax withholding that seems too high or too low — bring it to your HR or payroll department immediately. Don’t wait until year-end. Correcting payroll errors gets harder as time passes, and you don’t want to discover in February that you’ve been overpaying state taxes for nine months. Your pay stub is your receipt. Read it like one.

Frequently Asked Questions

What's the difference between gross pay and net pay?

Gross pay is the total amount you earned before anything gets taken out, including your salary or hourly wages plus overtime, holiday pay, or shift differentials. Net pay (also called take-home pay) is what actually hits your bank account after federal, state, and local taxes, plus deductions for insurance, retirement contributions, and anything else your employer withholds. For a single filer earning $60,000 a year with standard deductions, roughly 25-30% of gross pay disappears before it reaches you.

How much is FICA tax and what does it pay for?

FICA stands for the Federal Insurance Contributions Act, and it funds Social Security and Medicare. In 2026, you pay 6.2% of your wages toward Social Security (up to the wage base limit of $176,100) and 1.45% toward Medicare with no cap. Your employer matches both amounts. That means 7.65% of your gross pay goes to FICA before you see it. If you earn more than $200,000 as a single filer, an additional 0.9% Medicare surtax kicks in, and your employer doesn’t match that extra portion.

What are pre-tax deductions and why do they matter?

Pre-tax deductions come out of your pay before taxes are calculated, which reduces your taxable income. Common pre-tax deductions include 401(k) contributions, health insurance premiums, HSA contributions, FSA contributions, and commuter benefits. They matter because you’re effectively getting a discount on these expenses. If you contribute $500 per paycheck to your 401(k), that $500 isn’t taxed now, so you keep more of your paycheck than if you saved the same amount after taxes.

How do I know if my employer is withholding the right amount of federal tax?

Use the IRS Tax Withholding Estimator at irs.gov, which takes about 15 minutes and compares your current withholding against what you’ll likely owe. If your withholding is too high, you’re giving the government an interest-free loan all year. If it’s too low, you’ll owe money at tax time. Any time your life circumstances change, like getting married, having a kid, or picking up a second job, you should submit a new W-4 to your employer to update your withholding.

What should I do if I find an error on my pay stub?

Bring it to your HR or payroll department immediately. Don’t wait until year-end, because correcting payroll errors gets harder as time passes. The Department of Labor recovers hundreds of millions of dollars in back wages every year from employers who underpaid workers, and some of those errors aren’t caught until employees check their own stubs. Look for missing overtime, unauthorized deductions, incorrect tax withholding, and year-to-date totals that don’t add up.

What happens to Social Security tax if I switch jobs mid-year?

Each employer starts your Social Security wage base counter at zero, so you could end up overpaying. For example, if you earned $100,000 at your first job and $90,000 at your second, you’d have Social Security tax withheld on $190,000, which is $13,900 more than the 2026 wage base limit of $176,100. The overpayment gets refunded when you file your tax return, but you need to catch it yourself and claim the credit.