How to Read a Pay Stub: Complete US Guide

A pay stub, also called a payslip, is a breakdown of how your gross pay is reduced to net (take-home) pay through taxes and deductions. To read one, review five sections in order: earnings (hours, rate, and overtime), taxes (federal, state, and FICA), pre-tax deductions (401k, health insurance), post-tax deductions, and year-to-date totals.

"Pay stub" is the standard term in the United States, while "payslip" is the equivalent used in the UK, Australia, Canada, and most other countries. Both refer to the same document. This guide uses "pay stub" as the primary term, with "payslip" as an interchangeable synonym throughout.

This guide covers how to read a pay stub field by field, explains how US taxes and deductions work, maps out international terminology differences, and provides a checklist for spotting common errors.

Five Sections of Every Pay Stub

Every US pay stub tells one story: how your gross pay becomes your take-home pay. Before examining each field in detail, here is the structural map you need. Regardless of employer, payroll provider, or format (paper or digital), virtually every pay stub contains the same five sections in roughly the same order.

1. Employee and Employer Information This header block identifies who got paid and who paid them. You will find your name, address, the last four digits of your Social Security number, your employee ID, and the pay period dates. The employer's name, address, and federal EIN typically appear here as well.

2. Earnings / Gross Pay This section itemizes everything you earned during the pay period: regular hours, overtime hours, bonuses, commissions, and any other compensation. The total before anything is subtracted is your gross pay.

3. Tax Withholdings Federal income tax, state income tax (where applicable), Social Security tax, and Medicare tax are listed here. These are amounts your employer withholds on your behalf and sends directly to tax authorities.

4. Deductions (Pre-Tax and Post-Tax) Health insurance premiums, 401(k) contributions, HSA deposits, union dues, life insurance, and similar line items appear in this section. Some are deducted before taxes are calculated (pre-tax), and others are deducted after (post-tax). The distinction affects your taxable income.

5. Net Pay and Year-to-Date Totals The bottom line: net pay is the amount deposited into your bank account or printed on your check. Year-to-date (YTD) totals show cumulative figures for every category since January 1, which you will later reconcile against your W-2.

The equation that connects all five sections is straightforward:

Gross Pay - Taxes - Deductions = Net Pay (Take-Home Pay)

That single formula is the thread running through every pay stub you will ever receive. Once you understand where each number sits, reading a payslip becomes a matter of checking each section in sequence.

Section	What It Shows	Key Fields
Employee & Employer Info	Who was paid, by whom, and for which period	Name, address, SSN (last 4), pay period start/end dates
Earnings / Gross Pay	All compensation earned before deductions	Regular hours, overtime, bonuses, gross pay total
Tax Withholdings	Taxes withheld by your employer	Federal income tax, state income tax, Social Security, Medicare
Deductions	Voluntary and mandatory payroll deductions	401(k), health insurance, HSA, union dues, garnishments
Net Pay & YTD Totals	Your take-home amount and running annual totals	Net pay, YTD gross, YTD taxes, YTD deductions

This same section-by-section approach works for any financial document. If you also handle invoices in your role, a guide on understanding what invoices contain and why they matter applies the same systematic verification method.

Most US employers deliver pay stubs digitally through payroll platforms such as ADP, Gusto, Paychex, or Workday. Look for a self-service portal or mobile app where you can view and download each pay period's stub as a PDF. If you receive paper stubs, the fields and layout are the same. If you cannot find yours, contact your HR or payroll department.

Each of the five sections is covered in detail below, starting with earnings.

Earnings: Gross Pay, Hours, and Overtime

Gross pay is your total compensation before any taxes or deductions are subtracted. It is the top-line number on your pay stub, and every withholding that follows chips away at it until you reach net pay, the amount deposited into your bank account.

The earnings section of a typical US pay stub breaks down how that gross figure is built. Here are the fields you will see:

Regular Hours: The total number of standard hours worked during the pay period, up to 40 hours per workweek for most non-exempt employees.
Hourly Rate: Your base pay rate per hour.
Regular Earnings: Regular hours multiplied by your hourly rate. This is the foundation of your gross pay.
Overtime Hours: Any hours worked beyond 40 in a single workweek. Under the Fair Labor Standards Act (FLSA), non-exempt employees must receive overtime pay for these hours.
Overtime Rate: Typically 1.5 times your regular hourly rate, often labeled as "time and a half." Some employers or union agreements may offer double-time rates in specific circumstances, but 1.5x is the federal standard.
Overtime Earnings: Overtime hours multiplied by the overtime rate.
Bonuses: One-time or periodic lump-sum payments, such as performance bonuses, sign-on bonuses, or holiday bonuses. These appear as a separate line item in earnings.
Commissions: Earnings tied to sales performance or other measurable targets, common in sales roles.
Tips: Reported tip income, relevant for employees in service industries.
Other Supplemental Pay: Catch-all for shift differentials, on-call pay, retroactive adjustments, or any compensation that falls outside the categories above.

Worked Example: Hourly Employee

Suppose you are paid biweekly at $25 per hour and worked 8 hours of overtime during the pay period.

Regular hours: 80 hours x $25.00/hr = $2,000.00
Overtime hours: 8 hours x $37.50/hr (1.5 x $25.00) = $300.00
Gross pay: $2,300.00

That $2,300 is the number printed at the top of your earnings section. Nothing has been subtracted yet.

How Salaried Employees See It

If you are salaried, your pay stub typically divides your annual salary by the number of pay periods in the year. An employee earning $60,000 per year on a biweekly schedule would see:

$60,000 / 26 pay periods = $2,307.69 per pay period

The earnings section may show this as a single line rather than breaking out hours and rates, though some employers still list an implied hourly rate for record-keeping.

Gross Pay vs. Net Pay

Gross pay and net pay are the bookends of your pay stub. Gross pay is the starting point, the full amount you earned. Net pay is the ending point, the amount that actually reaches your bank account after every withholding has been applied. The gap between the two is filled by federal taxes, state taxes, FICA contributions, and any voluntary or mandatory deductions.

If the earnings figure at the top of your pay stub is wrong, every calculation that follows will be wrong too. Verify this number first. The next set of figures to check are your tax withholdings.

Taxes on Your Pay Stub: Federal, State, and FICA

The taxes section of your pay stub shows the money your employer withholds from each paycheck and sends directly to government agencies on your behalf. These withholdings fall into three categories: federal income tax, state and local income tax, and FICA taxes. Together, they typically represent the largest deductions from your gross pay.

Federal Income Tax Withholding

Federal income tax is not withheld at a single flat rate. The amount deducted from each paycheck depends on the information you provided on your W-4 form when you were hired, including your filing status, the number of dependents you claimed, and any additional withholding you requested. Employees who claim fewer allowances or elect extra withholding will see a larger federal tax deduction per pay period.

The IRS publishes updated withholding tables each year, and your employer's payroll system uses those tables along with your W-4 elections to calculate the correct amount. For most employees, effective federal withholding falls between roughly 10% and 22% of gross pay. If your rate falls well outside that range, or if the withholding looks too high or too low for your situation, the fix is usually submitting an updated W-4 to your employer rather than waiting until tax season.

State and Local Income Tax

Most US states impose their own income tax, and the withholding appears as a separate line item on your pay stub. However, nine states currently have no state income tax: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. If you work in one of these states, you will not see a state income tax deduction.

Beyond state-level taxes, some cities and counties levy their own local income taxes. These show up as additional line items, sometimes labeled with the municipality name or a code. Employees who live in one jurisdiction and work in another may see withholdings for both.

FICA Taxes: Social Security and Medicare

FICA stands for the Federal Insurance Contributions Act, and it funds two programs: Social Security and Medicare. Nearly every W-2 employee in the United States pays FICA taxes, and they appear as distinct line items on your pay stub.

Social Security tax is withheld at 6.2% of your gross pay, but only up to an annual wage base limit ($176,100 for 2025). Once your cumulative earnings for the year exceed that cap, Social Security withholding stops for the remainder of the calendar year. You will notice this on your pay stub if your salary is above the threshold: your net pay increases slightly in the later months of the year when the deduction drops off.

Medicare tax is withheld at 1.45% of all gross pay with no earnings cap. An additional 0.9% Medicare surtax kicks in for individual earnings above $200,000 per year. Unlike Social Security, Medicare withholding never stops regardless of how much you earn.

For most employees, the combined FICA rate is 7.65% (6.2% + 1.45%). Your employer pays an equal 7.65% on top of your wages, though that employer portion does not appear on your pay stub.

A Quick Worked Example

Using the $2,300 gross pay from the earnings section:

Social Security: $2,300 x 6.2% = $142.60
Medicare: $2,300 x 1.45% = $33.35
Total FICA: $2,300 x 7.65% = $175.95

Federal and state income tax amounts would vary based on your W-4 elections and the state where you work, so there is no single universal figure for those withholdings. Check your most recent W-4 and your state's tax rate to estimate those amounts.

That $175.95 in FICA is mandatory. The deductions covered next are ones you chose: health insurance, retirement contributions, and other benefit elections.

Pre-Tax and Post-Tax Deductions

The deductions section of your pay stub shows every amount subtracted from your earnings beyond taxes. These deductions fall into two categories, and the distinction between them directly affects how much you owe in taxes and how much lands in your bank account.

Pre-tax deductions are subtracted from your gross pay before federal and state income taxes are calculated. They reduce your taxable income, which means you pay less in taxes for every dollar you contribute. Post-tax deductions are subtracted after taxes have been calculated on your full earnings. They do not lower your tax bill.

This ordering matters more than most employees realize.

Pre-Tax Deductions: Lower Taxable Income

These common deductions reduce the income figure that federal, state, and FICA taxes are applied to:

Traditional 401(k) contributions: The most common retirement deduction for private-sector employees
403(b) contributions: The equivalent retirement plan for public-sector and nonprofit employees
Health Savings Account (HSA) contributions: Available to employees enrolled in a high-deductible health plan
Flexible Spending Account (FSA) contributions: Used for eligible medical or dependent care expenses
Employer-sponsored health insurance premiums: Medical, dental, and vision coverage premiums paid through your employer

To see the real impact, return to the $2,300 gross pay example from earlier. If you contribute $200 per pay period to a traditional 401(k), your employer calculates federal and state income taxes on $2,100 instead of $2,300. At a combined 22% marginal tax rate, that $200 contribution saves you $44 in taxes. The effective out-of-pocket cost of putting $200 toward retirement is only $156. Pre-tax deductions make every contributed dollar cheaper than it appears on the surface.

Post-Tax Deductions: No Tax Reduction

These deductions are taken from your pay after all taxes have been withheld:

Roth 401(k) contributions: You pay taxes now but withdraw tax-free in retirement
Life insurance premiums: Specifically, premiums on employer-provided coverage exceeding $50,000 in value
Disability insurance: Both short-term and long-term disability premiums
Wage garnishments: Court-ordered deductions including child support, tax levies, and defaulted student loans
Union dues: Membership fees for unionized employees
Charitable contributions: Payroll-deducted donations to approved organizations

Because post-tax deductions do not reduce your taxable income, a $200 Roth 401(k) contribution costs you the full $200 from your after-tax pay. The trade-off is that Roth contributions grow and are withdrawn tax-free in retirement.

Reading Deductions on Your Pay Stub

Your pay stub should list each deduction as a separate line item with both a current-period amount and a year-to-date total. If your stub groups deductions without breaking them out individually, request an itemized version from your payroll department. You need visibility into every line to verify that contribution rates, insurance premiums, and any garnishment amounts match what you authorized or what was court-ordered. Those YTD running totals are what you will reconcile against your W-2 when tax season arrives.

Year-to-Date Totals and W-2 Reconciliation

Every pay stub includes a set of year-to-date (YTD) columns that track cumulative totals from January 1 through the current pay period. These running sums appear alongside the current-period figures for gross earnings, each tax category, every deduction, and net pay. While it is tempting to focus only on the current paycheck, the YTD columns are where long-term accuracy lives.

YTD figures serve three practical purposes. First, they support mid-year tax planning. By comparing your YTD federal income tax withheld against a rough projection of your annual tax liability, you can determine whether your withholding is on pace or whether you need to submit an updated W-4. Catching an under-withholding issue in July is far less painful than discovering a large balance due the following April. Second, YTD totals are your primary tool for verifying your W-2 when it arrives in January. Third, reviewing cumulative data helps you spot errors that a single-period review would miss, such as a deduction that was doubled for one pay period months earlier and never corrected.

How to Reconcile Your Final Pay Stub Against Your W-2

At year-end, pull your last pay stub of the calendar year and set it next to your W-2. The YTD figures on that final stub should closely match several key boxes on the form:

YTD gross earnings minus pre-tax deductions (such as 401(k) contributions and health insurance premiums) should approximate W-2 Box 1 (Wages, tips, other compensation). Box 1 reflects taxable wages after pre-tax reductions, so it will typically be lower than gross pay.
YTD Social Security wages should match W-2 Box 3. This figure is capped at the annual Social Security wage base ($176,100 for 2025). If you earned above the cap, Box 3 will stop at that threshold.
YTD Medicare wages should match W-2 Box 5. Unlike Social Security wages, there is no cap on Medicare wages, so this figure should align with your total gross earnings subject to Medicare tax.
YTD federal income tax withheld should match W-2 Box 2.

A quick verification example. Suppose your final December pay stub shows YTD federal income tax withheld of $9,847.50, and your W-2 Box 2 reads $9,848.00. A difference of $0.50 is a normal rounding variance across 24 or 26 pay periods and requires no action. If, however, the difference is $200 or more, contact your payroll department before filing your tax return. Common causes of larger discrepancies include a mid-year W-4 adjustment that was processed late, a retroactive pay correction, or a payroll system error during a pay period transition.

This cross-referencing habit, comparing a primary document against a summary report, is how professionals catch errors across financial paperwork. The same discipline applies when understanding bank statement fields or auditing expense reports.

Pay Stub vs Payslip: How Terminology Differs Worldwide

If you searched for "payslip" and landed here, you are in the right place. The terms "pay stub" and "payslip" describe the same core document, but each country's version reflects its own tax system, social insurance structure, and retirement framework. Understanding a payslip from one country makes it far easier to read the equivalent in another.

In the United States, the standard term is pay stub (sometimes "pay statement" or "earnings statement"). In the United Kingdom, Australia, and most other English-speaking countries, payslip is the default. Canada splits the difference, using both "pay stub" and "pay statement" depending on the employer.

The table below maps the most common payroll concepts across four countries:

Concept	US	UK	Australia	Canada
The document itself	Pay Stub	Payslip	Payslip / Pay Advice	Pay Stub / Pay Statement
Income tax withholding	Federal / State Income Tax	PAYE (Pay As You Earn)	PAYG (Pay As You Go)	Federal / Provincial Income Tax
Social insurance	FICA (Social Security + Medicare)	National Insurance (NI)	Superannuation Guarantee	CPP (Canada Pension Plan) + EI (Employment Insurance)
Employer pension	401(k) / 403(b)	Workplace Pension	Superannuation	RRSP / RPP

A few structural differences stand out. UK payslips include a tax code assigned by HMRC that determines the employee's tax-free allowance for the year. Get the wrong tax code and every paycheck will be over- or under-taxed until it is corrected. Australian payslips include a mandatory employer superannuation contribution, currently set at 11.5% of ordinary earnings, which appears as a separate line item rather than being bundled into a general deductions block. Canadian payslips break income tax into separate federal and provincial lines, similar to the US federal and state split, making cross-border comparisons between the two countries relatively straightforward.

Regardless of terminology, the underlying skill is the same: verifying that the numbers on your pay document match what you earned, what was withheld, and what landed in your account. That skill extends beyond payroll. The same principles apply when reading and verifying invoices or reviewing any financial document where accuracy directly affects your money.

How to Spot and Fix Common Pay Stub Errors

Pay stub errors are more common than most employees realize, and the financial consequences add up quickly. In fiscal year 2025, the U.S. Department of Labor recovered over $184 million in back wages for nearly 146,000 workers due to Fair Labor Standards Act violations, with overtime underpayments alone accounting for $146 million, according to U.S. Department of Labor enforcement data. Those numbers represent only the cases that were reported and investigated. Employees who review their pay stubs each period are the first line of defense against wage errors that might otherwise go unnoticed for months or years.

Use the following checklist every pay period to verify your pay stub is accurate:

Overtime calculation: Verify that overtime hours are paid at 1.5x your regular hourly rate (or the applicable rate under your state's law or employment agreement). Multiply your overtime hours by 1.5x your regular rate and confirm the resulting figure matches the overtime earnings on your stub.
Tax withholding consistency: Compare your current-period federal and state tax withholdings against the previous pay period. A sudden increase or decrease without a corresponding W-4 update, raise, or bonus warrants investigation with your payroll department.
Benefits enrollment: Confirm that every benefit you elected during open enrollment (health insurance, dental, vision, 401(k) contributions) appears as a deduction on your stub. A missing deduction after enrollment changes is one of the most common payroll errors, and it can trigger unexpected lump-sum corrections later.
Year-to-date accumulation: Check that each YTD figure equals the prior period's YTD total plus the current period amount. If the math does not add up, a retroactive adjustment may have been applied without notice. Flag any discrepancy immediately.
Social Security wage cap: Once your cumulative gross earnings exceed $176,100 for the year, verify that Social Security withholding (6.2%) drops to zero for the remainder of the calendar year. If your employer continues withholding after you hit the cap, you are being overtaxed.

Worked example: Spotting an overtime error. An employee earning $25.00 per hour works 8 overtime hours in a pay period. The correct overtime rate is $25.00 x 1.5 = $37.50 per hour. Expected overtime pay is 8 x $37.50 = $300.00. If the pay stub shows $250.00 for those 8 overtime hours, the employer likely applied the regular $25.00 rate instead of the 1.5x rate, resulting in a $50.00 underpayment for that single period. Over a full year of consistent overtime, that same error compounds into hundreds of dollars in lost wages.

What to do if you find an error:

Document the discrepancy with specific numbers, dates, and pay period references. Save copies of the affected pay stubs.
Contact your HR or payroll department in writing with your documentation. A written record creates a paper trail if the issue escalates.
If the error is not corrected within a reasonable timeframe, file a complaint with your state labor board or the U.S. Department of Labor's Wage and Hour Division.

If you process payroll for a team, the same verification logic applies at scale. Common systematic errors, such as an overtime rate applied at 1x instead of 1.5x across an entire department, are easier to catch when pay stub data is structured and auditable. Converting payroll PDFs to structured spreadsheets makes it possible to reconcile pay stub data against payroll reports automatically, and platforms that automate payslip data extraction can turn PDF pay stubs into structured data for audit and compliance review.

Reading a pay stub is a five-section process: earnings, taxes, pre-tax deductions, post-tax deductions, and year-to-date totals. Each section feeds into the next, reducing gross pay to net pay. Checking each pay period takes only a few minutes and protects against errors that accumulate silently over time. Whether you call it a pay stub or a payslip, the verification process is the same: compare what you expected to earn against what your employer recorded, and speak up when the numbers do not match.