How to Read a Pay Stub: A Line-by-Line Guide to Gross Pay, Taxes and Deductions

Your pay stub explains how your employer moved from the wages you earned to the amount deposited in your account. If the deposit looks wrong, start by reading the stub rather than guessing that one tax rate changed. A useful check has three parts: confirm the pay period and gross wages, review each deduction, and compare current-period numbers with year-to-date totals.

This guide walks through a sample paycheck and shows why federal income-tax wages can differ from Social Security and Medicare wages. It also gives you a checklist for asking payroll a specific question. The example uses 2026 federal payroll figures and deliberately leaves out state and local taxes so the arithmetic is easy to follow. Your actual stub may include those taxes, additional benefits, overtime, commissions, reimbursements or other lines.

The pay period is the span of work covered by the check. The pay date is when the wages are paid. They can fall in different months or even different calendar years. A pay period ending in December may be paid in January, for example, so look at the payment date and the employer's records when comparing annual payroll totals.

Check that the pay period matches the hours or salary you expected. If you recently started a job, took unpaid time off or changed pay schedules, a partial period may explain a smaller gross amount. The U.S. Department of Labor's recordkeeping guidance identifies the payment date, pay period, hours and additions or deductions among the payroll records employers must maintain under the Fair Labor Standards Act.

The frequency matters when you budget. Weekly pay usually produces 52 regular paydays in a year, biweekly usually produces 26, semimonthly produces 24, and monthly produces 12. Biweekly means every two weeks; semimonthly means twice per calendar month. A particular biweekly calendar can have 27 pay dates, so check your employer's schedule instead of assuming every year has the same count.

Do not compare a biweekly deposit with a semimonthly deposit as if the periods were equal. A $78,000 annual salary divided by 26 is $3,000 in gross pay per biweekly period under a simple even-pay assumption. Dividing the same salary by 24 gives $3,250 per semimonthly period. That difference describes the timing and size of individual checks, not a change to the annual salary.

Gross pay is generally the amount earned before payroll deductions. A stub may show regular wages, overtime, commissions, bonuses, paid leave and other earnings on separate rows. Start by checking each row against your time records, salary agreement and employer's pay policies.

For an hourly worker, regular pay may be shown as hours multiplied by the hourly rate. Forty hours at $25 an hour produces $1,000 in regular gross wages. Overtime treatment depends on the worker's circumstances and applicable law; do not assume every salaried or hourly position is treated the same. The Department of Labor explains the federal rules in its overtime overview.

For a salaried worker, gross pay may be stated as a periodic amount. An adjustment for unpaid leave, a commission or a retroactive raise can make it differ from the previous check. If a number is unexpected, identify the earnings row and ask which dates and rate it covers.

Reimbursements deserve their own review. A repayment of a business expense is not necessarily the same as wages. Whether an amount is taxable depends on the facts and the employer's arrangement. A stub may display a reimbursement near earnings even when its tax treatment differs. Ask payroll how a specific item was coded rather than assuming its position on the page determines its tax status.

Consider a fictional employee paid $3,000 in gross wages every two weeks. For this example, the employee contributes $150 to a traditional 401(k) and pays $100 for an eligible employer health benefit through a plan that excludes that amount from federal income-tax, Social Security and Medicare wages. The employee's federal income-tax withholding is assumed to be $250. There is no state or local tax in the example.

The federal withholding figure is an assumption used to demonstrate the arithmetic. It is not a calculation from a particular Form W-4 or a promise that a $3,000 paycheck should have $250 withheld. Actual federal withholding depends on payroll-period wages, Form W-4 entries and the employer's method.

In this scenario, the $100 eligible health deduction reduces the wages subject to both Social Security and Medicare, but the traditional 401(k) contribution remains in those wage bases. Social Security and Medicare wages are therefore $2,900: $3,000 minus $100. At 6.2%, Social Security withholding is $179.80. At 1.45%, Medicare withholding is $42.05.

Subtract the two benefit deductions and the three assumed or calculated tax lines from $3,000: $3,000 − $150 − $100 − $250 − $179.80 − $42.05 = $2,278.15. The federal income-tax wage base in this simplified example is $2,750, after the $150 traditional 401(k) contribution and the $100 qualifying health deduction. The employer still uses the applicable withholding method and W-4 information to determine the actual federal withholding.

This is not a universal rule for every health deduction. The example assumes a qualifying arrangement and exclusion. If your insurance is paid after tax, is not eligible for the exclusion, or has another treatment, the taxable wage bases and result can differ. The IRS fringe-benefit guide explains the employer rules.

The federal withholding row is money your employer sends toward your federal income tax. It is not necessarily your final tax liability for that paycheck or for the year. When you file a return, your total tax and payments are reconciled with applicable credits and other income.

Employers use Form W-4 and an approved withholding method. Form W-4 can include filing status and adjustments for multiple jobs, credits, other income, deductions or extra withholding. The IRS Publication 15-T describes the percentage and wage-bracket methods used by employers.

A bonus can have different withholding from regular wages under supplemental-wage rules. A larger deduction on that one check does not mean the bonus is taxed at a permanent, separate final income-tax rate. The method used for withholding and the final return calculation are separate questions.

If your circumstances changed, use recent pay stubs and the IRS Tax Withholding Estimator to assess whether your W-4 still reflects your situation. The estimator can ask for more information than a simple paycheck calculator. A refund or balance due depends on the full return, including other income and payments.

Social Security and Medicare are payroll taxes under FICA. For most covered employees, the employee Social Security rate is 6.2% up to an annual wage base, and the regular Medicare rate is 1.45% with no comparable wage cap. The employer generally pays a separate matching amount. See IRS Topic 751.

For 2026, the Social Security wage base is $184,500. For 2027, the Social Security Administration announced $192,300. If you reach the relevant base with one employer, the Social Security line generally stops for the rest of that calendar year, while regular Medicare continues. See the SSA 2027 fact sheet.

Additional Medicare Tax may also appear for higher-paid employees. Employers generally begin withholding the extra 0.9% on Medicare wages they pay an employee above $200,000 in a calendar year. The employee's final liability depends on the applicable return rules and filing status. The IRS questions and answers explain why employer withholding and return liability can differ.

If a FICA line appears unexpected, compare the deduction with the relevant taxable wage amount, not just gross pay. Also check year-to-date wages and whether the annual Social Security base has been reached. Payroll can explain how a benefit or correction affected the wage base.

Your stub may list state income-tax withholding, city or county tax, disability insurance, paid-leave contributions or other state-specific deductions. Names and rates vary. Some states do not impose a state individual income tax on wages, but that does not mean every paycheck in those states has no state-related deductions.

Workers who live and work in different states should check both states' rules and the employer's payroll setup. Reciprocity agreements can affect withholding, but they are not universal. If you work remotely, ask payroll which work location is on file and whether you need to submit a state certificate. Use the applicable state revenue or labor agency as the source for the particular situation.

Do not assume a state income-tax estimate includes every local tax or mandatory payroll program. A planning calculator can be useful for a scenario, but your actual pay stub and the relevant agency's instructions are the places to verify the lines that apply to you.

A retirement contribution, insurance premium or HSA contribution is not the same thing as a tax. It reduces the amount deposited, but it may buy coverage or add money to an account owned for your benefit. Your stub should show the deduction separately where the employer's payroll system provides that detail.

Traditional 401(k) employee deferrals generally reduce federal income-tax wages but remain subject to Social Security and Medicare. Roth 401(k) contributions do not provide the same current federal income-tax exclusion. Employer matching contributions are separate from your employee deduction and are not necessarily included in the deposit shown on a check. The IRS retirement-plan FAQ compares these treatments.

HSA treatment also depends on how the contribution is made. The IRS W-2 instructions distinguish employer contributions, including eligible employee contributions through a cafeteria plan, from contributions an employee makes outside that arrangement. A contribution made outside payroll may be deductible on the return if eligible, but it is not automatically excluded from payroll wages. Check your plan and the IRS W-2 instructions.

A benefit election can change at open enrollment, after a qualifying event or when a contribution percentage changes. If a January deposit is lower than December, compare benefit lines as well as taxes. A higher retirement contribution may reduce current take-home while increasing the amount directed to retirement savings.

The current-period column describes this check. The year-to-date column accumulates the employer's amounts from the start of the calendar year through the current payment. Both matter. A single paycheck can look normal while year-to-date deductions reveal a missed contribution, an unexpected adjustment or a wage-base issue.

Compare gross wages year to date with the payroll dates covered. Then compare taxable wage fields, federal withholding, Social Security withholding and benefits. A catch-up payroll correction can make the current check unusually large or small; the year-to-date total provides context. If an amount was corrected, ask payroll which prior period it relates to.

At year end, retain the final stub and compare it with the Form W-2 when available. They may not match line for line because the W-2 reports specific taxable wage and withholding categories, and some adjustments or reporting rules differ from a simple gross-pay total. Ask payroll for an explanation of a material difference rather than changing a tax return based on a guess.

Box 1 reports wages subject to federal income-tax reporting. Box 3 reports Social Security wages, subject to the annual wage base; Social Security tips are reported separately in Box 7. Box 5 reports Medicare wages and tips, which are not limited by the Social Security wage base.

A traditional 401(k) contribution can be excluded from Box 1 while remaining included in Boxes 3 and 5. In contrast, certain eligible benefits can reduce multiple wage bases. The result is that Box 1, Box 3 and Box 5 can legitimately differ. The IRS W-2 instructions describe the reporting requirements and exceptions.

The sample employee's simplified annual values, assuming all 26 checks are identical and no other changes, illustrate the idea. Gross wages would be $78,000; traditional 401(k) contributions $3,900; and the qualifying health deduction $2,600. Federal income-tax wages would be $71,500, while Social Security and Medicare wages would each be $75,400 in this simplified case. These are illustrative wage bases, not a completed W-2; real W-2 reporting can include additional items.

The example does not reach the 2026 or 2027 Social Security wage base. If wages exceed the base, Box 3 and Box 5 can differ because Medicare has no equivalent cap. Tips, taxable benefits, adjustments and other special rules can also change the comparison.

First, write down the precise issue: the pay date, the line label, the amount shown and what you expected. Compare the current stub with a previous one that has the same pay frequency. Check for changes in hours, bonuses, benefits, work location and withholding elections.

Second, gather supporting records. Depending on the question, these could include a timesheet, offer letter, benefit election confirmation, W-4 copy or prior pay stub. You do not need to send every personal document to ask an initial question. Use your employer's approved payroll channel and follow its instructions for sensitive records.

Third, ask a narrow question. For example: “My Social Security wages were $2,900 this period, but the Social Security deduction was $200. Can you explain which wages were included and whether an adjustment was made?” Or: “My retirement deduction rose from $120 to $150. Did my contribution percentage change at open enrollment?”

If payroll identifies an error, ask when a correction will appear and whether a corrected wage statement will be needed. Keep the explanation and corrected records. If the issue remains unresolved, applicable state wage agencies, the Department of Labor or a qualified adviser may be able to explain available next steps. Deadlines and remedies depend on the facts.

• Confirm the pay date and the start and end of the pay period.
• Match regular hours, overtime, salary and adjustments to your records.
• Compare gross pay with the earnings rows before looking at net pay.
• Identify federal, state and local withholding separately.
• Compare Social Security and Medicare deductions with their own taxable wage fields.
• Check retirement, health and other benefits against your elections.
• Review current-period and year-to-date amounts for corrections or wage-base limits.
• Keep the final pay stub and compare it with your W-2 when it arrives.
• Ask payroll to explain a specific line before assuming that every difference is an error.

Why is my deposit lower than my gross pay?

The deposit is after payroll deductions. These may include federal income-tax withholding, Social Security and Medicare, state or local taxes, retirement contributions, health coverage and other authorized or required deductions. The exact items depend on the employee and employer.

Why do federal taxable wages differ from Social Security wages?

Different rules apply to each wage base. A traditional 401(k) deferral generally reduces federal income-tax wages but remains subject to Social Security and Medicare. Other eligible benefits can affect more than one wage base. Verify the plan's treatment with payroll.

Is federal withholding the same as final federal income tax?

No. Withholding is a payment made during the year. Your return calculates the tax ultimately due based on the information applicable to the whole year. The difference between tax and payments contributes to a refund or balance due.

Can the same salary produce different deposits?

Yes. Pay frequency, W-4 entries, benefits, work location, local taxes, bonuses and year-to-date wages can all change a deposit. Two employees with the same salary can have different payroll deductions.

What if Social Security was withheld by two employers?

Combined withholding can exceed the annual employee maximum when each employer withholds on wages it pays. The IRS distinguishes excess withholding from multiple employers from an error by one employer. Consult IRS Topic 608 and the instructions for the relevant tax year.

Does a paycheck calculator replace a pay stub?

No. A calculator provides an estimate based on its inputs and assumptions. Your pay stub records what your employer actually paid and deducted. Use both to understand the difference and contact payroll if a recorded amount needs explanation.

This resource relies on the IRS W-2 instructions, IRS Publication 15-T, IRS Publication 15-B, IRS Topic 751, and the Department of Labor's recordkeeping fact sheet. The worked example is illustrative and should be reviewed against an individual employer's payroll method and plan documents.