How to Read Your Paycheck Stub

Every U.S. paycheck stub follows roughly the same structure. Here's what each line actually means.

Gross Pay

This is your total earnings before anything is taken out — your salary or hourly rate times hours worked, plus any overtime, bonuses, or commissions for that pay period.

Federal Income Tax Withholding

An estimate of your annual federal tax liability, spread across each paycheck. The amount withheld is based on the filing status and allowances you entered on your Form W-4, not your final tax bill — that's settled when you file your return.

State Income Tax Withholding

Similar to federal withholding, but set by your state. Nine states (including Texas, Florida, and Washington) don't withhold any state income tax at all.

Social Security (OASDI)

A flat 6.2% of wages, up to an annual wage base ($168,600 for 2026). This funds Social Security retirement, disability, and survivor benefits. Your employer matches this amount.

Medicare (HI)

A flat 1.45% of all wages, with no cap. Employees earning over $200,000 in a year pay an additional 0.9% Medicare surtax on the amount above that threshold.

Pre-Tax Deductions

Items like 401(k) contributions, health insurance premiums, and HSA contributions are usually subtracted before taxes are calculated, which lowers your taxable income (and often your tax bill).

Net Pay

What's left after every tax and deduction — the amount actually deposited into your bank account.

See also: Federal Withholding Explained and Common Payroll Deductions Explained.