A pay stub shows how your employer got from what you earned to what actually landed in your bank account. The gap between those two numbers is usually bigger than people expect the first time they look closely — the diagram above walks through a real example line by line.
What Each Section Means
- Pay period and pay date — the dates the paycheck covers, and the day the money is paid. Pay usually arrives a few days after the period ends.
- Gross pay — everything you earned in the period before anything is taken out: hours worked × hourly rate, or your yearly salary divided by the number of paychecks in a year.
- Deductions — the amounts subtracted from gross pay, in two groups:
- Taxes: federal income tax, Social Security (6.2%), Medicare (1.45%), and state or local income tax where it applies.
- Other deductions: anything you signed up for, such as health insurance or a retirement plan.
- Net pay — what’s left after every deduction. This is the amount actually deposited, usually printed in bold near the bottom.
- Year-to-date (YTD) totals — running totals for the calendar year so far. Your last stub of the year should match your W-2.
Why Net Pay Is Smaller Than You Expect
Someone earning $15 an hour for 20 hours a week earns $300 a week in gross pay. Social Security and Medicare alone take 7.65% of that — about $23 — before any income tax or benefits. That gap is normal, not a mistake; it’s the same set of deductions on nearly every U.S. paycheck.
Pre-Tax vs. Post-Tax Deductions
A pre-tax deduction (most retirement contributions and many health insurance premiums) comes out of your gross pay before income tax is figured, so it lowers the amount you’re taxed on. A post-tax deduction comes out after taxes, so it doesn’t. That’s why a stub’s “taxable wages” line is often lower than gross pay.
Tip: Your federal income tax withholding comes from the W-4 form you filled out when you started. If you’re withholding too much or too little, you can hand your employer a new W-4 at any time — the IRS has a free online Tax Withholding Estimator to help.
Checking Your Pay Stub for Errors
- Check your hours and pay rate first. This is where most real mistakes are.
- Make sure every benefit deduction is one you actually signed up for.
- Subtract last period’s YTD totals from this period’s. The difference should equal this period’s numbers.
If something looks wrong, contact your employer’s payroll or HR team. Most errors are quick to fix when you catch them early, and much harder to untangle after the tax year ends.
Common Mistakes
- Only looking at net pay. Reading the whole stub is how you catch a wrong rate or missing hours.
- Throwing stubs away. Keep at least the current year’s — landlords, lenders and financial aid offices often ask for them as proof of income.