How to Read Your Pay Stub (Plain-English Guide)

Most people glance at the "Net Pay" line, confirm the money arrived, and move on. But your pay stub is a detailed record of exactly where your money goes — and knowing how to read it lets you catch errors, optimize your W-4, and understand why your take-home feels smaller than you expected.

Every Line on Your Pay Stub, Explained

Gross Pay

Your total earnings before any deductions. This is the number in your employment contract.

Biweekly: $3,846.15 (= $100,000 ÷ 26 pay periods)

Federal Income Tax

Fed Tax / FIT

Withheld based on your W-4 form and the IRS tax tables. Using the 2020+ W-4, this depends on your filing status and Step 3 (credits) and Step 4 (extra withholding).

For $100K single filer: ~$492/paycheck (biweekly)

Social Security

OASDI / SS Tax

6.2% of gross wages up to the Social Security wage base ($184,500 in 2026). If you earn above this cap, withholding stops for the year.

$3,846.15 × 6.2% = $238.46/paycheck

Medicare

Med Tax / HI

1.45% of all wages with no income cap. High earners (above $200K single) also pay an additional 0.9% Additional Medicare Tax.

$3,846.15 × 1.45% = $55.77/paycheck

State Income Tax

State Tax / SIT

Varies by state. Nine states have no state income tax (Texas, Florida, Nevada, Washington, Wyoming, Alaska, South Dakota, Tennessee, New Hampshire). Others range from flat rates (e.g., Illinois 4.95%) to progressive rates up to 13.3% (California).

TX residents: $0. NY residents on $100K: ~$375/paycheck

401(k) / 403(b)

401K / 403B

Pre-tax retirement contributions. Reduces your taxable income for federal and state purposes. 2026 employee contribution limit: $23,500 ($31,000 if age 50+).

5% contribution on $3,846: $192.31/paycheck

Health Insurance

Med / Dental / Vision

Your share of employer-sponsored health insurance premiums. Usually pre-tax (reduces taxable income). Employer typically covers 70–80% of the total premium.

Varies widely: $100–$400/paycheck for individual coverage

Net Pay

Take-Home / Net

What actually hits your bank account. Gross pay minus all taxes and voluntary deductions.

The number that matters for your monthly budget

Why Your Tax Withholding Might Be Off

Two common reasons your federal withholding surprises you:

Multiple jobs: If you and your spouse both work, or if you hold two jobs, the IRS withholds for each job as if it's your only income. But your combined income pushes you into higher brackets. The W-4 has a "Multiple Jobs" section specifically to correct this.

Outdated W-4: If you filed a pre-2020 W-4 with your employer, you were using allowances (each one reducing withholding). The 2020+ W-4 eliminated allowances entirely. If you haven't updated your W-4 since 2019, your withholding may be miscalibrated.

Pre-Tax vs. Post-Tax Deductions

Some deductions reduce your taxable income before taxes are calculated. Others come out after taxes. This matters a lot.

Pre-tax (reduces taxable income): 401(k)/403(b) traditional contributions, HSA contributions, employer-sponsored health/dental/vision insurance premiums, FSA contributions.

Post-tax (no tax reduction): Roth 401(k) contributions, after-tax life insurance beyond $50K, union dues in most cases, wage garnishments.

The practical implication: contributing $500/month to a traditional 401(k) doesn't reduce your take-home by $500 — because the contribution reduces your taxes too. Your actual take-home reduction is closer to $350–$380, depending on your tax bracket. The "cost" of saving for retirement is much lower than the contribution amount.

How to Verify Your Pay Stub Is Correct

Use a take-home pay calculator (like the one at TakeHomeUSA) to estimate your expected net pay. Enter your gross salary, state, and filing status. If the calculator's estimate and your actual net pay are off by more than a few percent:

Check your W-4 on file with HR — you may have old settings or extra withholding requested
Verify your benefit deductions match your enrollment selections
Look for one-time deductions (back-owed benefits, overpayment corrections)
Confirm your pay period type (weekly/biweekly/semimonthly/monthly) matches expectations

Frequently Asked Questions

What is OASDI on my pay stub?

Social Security tax (Old Age, Survivors, Disability Insurance). 6.2% of gross wages up to $184,500 in 2026.

Why is my federal withholding different from what I expected?

Usually due to W-4 settings, multiple jobs, or extra withholding elections. Review your W-4 with HR, or use the IRS Tax Withholding Estimator.

What is the difference between gross pay and net pay?

Gross pay is your salary before taxes. Net pay (take-home) is what remains after all tax and benefit deductions — typically 65–80% of gross.

How to Read Your Pay Stub: A Plain-English Guide