How to Read Your Pay Stub: Every Line Explained
A pay stub (also called a paycheck stub, earnings statement, or pay advice) is a document that accompanies your paycheck and shows how your gross pay was reduced to net pay through taxes and deductions. In 2026, the combined FICA rate is 7.65% (6.2% Social Security on wages up to $184,500 plus 1.45% Medicare on all wages), federal income tax ranges from 10% to 37%, and state taxes vary from 0% to 13.3%. Understanding every line on your pay stub helps you verify accuracy, plan your finances, and optimize your take-home pay.
Quick Answer
- *For 2026, the Social Security wage base is $184,500 (up from $176,100 in 2025), meaning you pay 6.2% on the first $184,500 of earnings.
- *The total FICA rate is 7.65% for employees (6.2% Social Security + 1.45% Medicare), with an additional 0.9% Medicare surtax on wages over $200,000.
- *According to BSI Payroll, your employer matches your FICA contribution, bringing the total to 15.3% of your wages.
- *For a $75,000 salary, typical total deductions are 25–35%, leaving net pay of roughly $52,000–$56,000 depending on state and benefits.
The Four Sections of Every Pay Stub
Regardless of your employer or payroll provider, every pay stub contains these four sections:
- Earnings: Gross pay, hours worked, pay rate, overtime, bonuses, commissions.
- Taxes: Federal income tax, Social Security, Medicare, state tax, local tax.
- Deductions: Health insurance, 401(k), dental, vision, life insurance, HSA, FSA, union dues.
- Summary: Net pay (take-home), YTD totals, PTO balances.
Section 1: Earnings (Gross Pay)
The earnings section shows everything your employer paid you before deductions. Common line items include:
| Label | What It Means | Example |
|---|---|---|
| Regular / Salary | Base pay for the period | $2,884.62 (biweekly on $75K) |
| Overtime (OT) | 1.5x rate for hours over 40/week | $108.17 (3 hrs at $36.06) |
| Bonus | One-time or recurring bonus payment | $500.00 |
| Commission | Sales-based earnings | Varies |
| PTO / Holiday | Paid time off used that period | $576.92 (2 days) |
| Gross Pay | Total of all earnings above | $2,884.62 |
For salaried employees, gross pay is your annual salary divided by the number of pay periods (26 for biweekly, 24 for semi-monthly, 12 for monthly). For hourly workers, it is hours worked multiplied by your hourly rate.
Section 2: Taxes
Taxes are mandatory deductions required by federal, state, and sometimes local governments. Here is what each line means:
Federal Income Tax (FIT / Fed Tax / Fed W/H)
The amount your employer withholds based on your W-4 elections and the IRS tax tables. In 2026, federal tax rates range from 10% to 37% across seven brackets. Your effective withholding rate depends on your salary, filing status, and any adjustments on your W-4.
Social Security (OASDI / SS Tax / FICA-SS)
A flat 6.2% of your gross pay, up to the wage base of $184,500 in 2026. Once your YTD earnings hit this cap, Social Security withholding stops for the rest of the year. Maximum employee contribution: $184,500 × 6.2% = $11,439.
Medicare (Med Tax / FICA-Med)
A flat 1.45% of all gross pay with no wage cap. An additional 0.9% Medicare surtax applies to wages exceeding $200,000 ($250,000 for married filing jointly). This surtax is not matched by the employer.
State Income Tax (SIT / State W/H)
Varies by state. Nine states have no income tax (Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, Wyoming). California tops the list at 13.3%. Your state withholding depends on your income and state-specific W-4 elections.
Local / City Tax
Some cities and counties impose additional income taxes. New York City residents pay up to 3.876%. Many Pennsylvania municipalities have earned income taxes. These appear as separate line items.
Section 3: Voluntary Deductions
These are benefits you elected during enrollment. Common deductions include:
| Abbreviation | Deduction | Pre-Tax? | Typical Amount |
|---|---|---|---|
| 401(k) / 403(b) | Retirement contribution | Yes | $200–$942/pay period |
| Roth 401(k) | After-tax retirement | No | Varies |
| Medical / Health | Health insurance premium | Yes | $50–$400/pay period |
| Dental | Dental insurance premium | Yes | $10–$50/pay period |
| Vision | Vision insurance premium | Yes | $5–$20/pay period |
| HSA | Health Savings Account | Yes | $50–$330/pay period |
| FSA | Flexible Spending Account | Yes | $25–$125/pay period |
| Life / AD&D | Life / accidental death insurance | Varies | $5–$30/pay period |
| LTD / STD | Long/short-term disability | Varies | $10–$40/pay period |
Pre-tax deductions(traditional 401(k), health insurance, HSA) reduce your taxable income, which lowers your federal and state tax withholding. This is why increasing your 401(k) contribution does not reduce your paycheck by the full amount — you save taxes too.
Section 4: Summary and Net Pay
The bottom line of your pay stub shows:
- Net Pay: What you actually receive (deposited or as a check). This is gross pay minus all taxes and deductions.
- YTD Totals: Cumulative year-to-date amounts for each category.
- PTO / Vacation Balance: Remaining paid time off hours or days (if your employer tracks it here).
Worked Example: $75,000 Annual Salary (Biweekly)
| Line Item | Amount | Notes |
|---|---|---|
| Gross Pay | $2,884.62 | $75,000 ÷ 26 pay periods |
| Federal Income Tax | −$310.00 | ~10.7% effective rate, single, no extra withholding |
| Social Security | −$178.85 | 6.2% of gross |
| Medicare | −$41.83 | 1.45% of gross |
| State Tax (CA) | −$115.00 | ~4% effective, varies by state |
| SDI (CA only) | −$33.17 | State disability insurance |
| 401(k) (10%) | −$288.46 | Pre-tax, reduces taxable income |
| Health Insurance | −$150.00 | Employee share, pre-tax |
| Dental | −$20.00 | Pre-tax |
| Net Pay | $1,747.31 | 60.6% of gross |
In this California example, the employee keeps about 60.6% of gross pay. In a no-income-tax state like Texas, the same employee would take home roughly $1,895 per paycheck — about $148 more.
Common Pay Stub Abbreviations
| Abbreviation | Meaning |
|---|---|
| FIT / Fed W/H | Federal Income Tax Withheld |
| SIT / State W/H | State Income Tax Withheld |
| OASDI / SS | Social Security (Old Age, Survivors, Disability Insurance) |
| MED / HI | Medicare / Hospital Insurance |
| YTD | Year-To-Date |
| PTO | Paid Time Off |
| HSA | Health Savings Account |
| FSA | Flexible Spending Account |
| EE | Employee (your share) |
| ER | Employer (company’s share) |
| GTL | Group Term Life Insurance |
| SDI / CASDI | State Disability Insurance |
Estimate your take-home pay
Use our free Take Home Pay Calculator →Also useful: Paycheck Calculator · Income Tax Calculator
Frequently Asked Questions
What does FICA mean on my pay stub?
FICA stands for the Federal Insurance Contributions Act. It includes Social Security tax (6.2% up to $184,500 in 2026) and Medicare tax (1.45% on all wages). Your employer matches these amounts. It may appear as FICA, OASDI, SS Tax, Med Tax, or Medicare on your stub.
Why is my net pay so much less than my gross pay?
Multiple mandatory and voluntary deductions reduce your gross to net pay: federal tax (10–37%), Social Security (6.2%), Medicare (1.45%), state and local taxes (0–13.3%), plus 401(k), health insurance, and other benefits. Total deductions typically range from 25–35% of gross pay.
What is the difference between gross pay and net pay?
Gross pay is your total earnings before deductions. Net pay is what you actually receive after all taxes and deductions are subtracted. A $75,000 gross salary typically results in $52,000–$56,000 net pay depending on your state and benefit elections.
What does YTD mean on a pay stub?
YTD stands for Year-To-Date — the cumulative total from January 1 through the current pay period. Your stub shows YTD totals for gross pay, each deduction, and net pay. These figures help you track earnings, verify tax accuracy, and compare against your W-2.
Should I check my pay stub every pay period?
Yes. Review your stub each period to verify hours, pay rate, and deductions are correct. Common errors include incorrect overtime, missing bonuses, wrong withholding after a W-4 change, and benefit deductions that do not match your elections.