How to Read a Paycheck - Understand Every Line on Your Pay Stub

Official Sources & References

This content references data from the following authoritative sources. All tax rates, brackets, and thresholds are verified against official government publications:

This content is for informational purposes only and does not constitute tax advice. Consult a qualified tax professional or the IRS for guidance specific to your situation.

A Complete Guide to Reading Your Pay Stub

Whether you receive a physical check with a detachable stub or view your pay information online, understanding each section of your pay stub empowers you to catch errors, optimize your withholdings, and plan your finances effectively.

Section 1: Employee and Pay Period Information

The top of your pay stub identifies you and the pay period. Look for your name, employee ID, pay period dates (e.g., Jan 1–Jan 14), pay date (when the money hits your account), and pay frequency (weekly, bi-weekly, semi-monthly, or monthly).

Section 2: Earnings (Gross Pay)

This section shows all types of compensation you earned during the period:

Regular hours/salary — your base compensation. For hourly workers, this shows hours multiplied by rate. For salaried employees, this is your annual salary divided by pay periods.
Overtime — hours worked beyond 40 per week at 1.5x your regular rate
Bonuses — any supplemental pay, which may be taxed at the flat 22% federal rate
Commissions, tips, or PTO payouts — other forms of taxable compensation

Section 3: Tax Withholdings

This is where most people get confused. Here is what each tax line means:

Federal Income Tax (FIT or Fed W/H) — calculated based on your W-4 elections and the IRS tax brackets. This is the most variable deduction and changes with income and filing status.
Social Security (OASDI or SS) — always 6.2% of gross wages up to $176,100 (2025). Your employer pays a matching 6.2%.
Medicare (MED or Med Tax) — always 1.45% of all wages with no cap. An additional 0.9% applies to wages over $200,000.
State Income Tax (SIT or State W/H) — varies by state. Nine states have no income tax. Others range from 1% to 13.3%.
Local/City Tax — applicable in certain cities like NYC (up to 3.876%), Philadelphia (3.75%), or Detroit (2.4%).
SDI/SUI — State Disability Insurance or State Unemployment Insurance deducted in certain states like California, New Jersey, and New York.

Section 4: Deductions

Deductions are split into pre-tax and post-tax categories. Pre-tax deductions (401k, health insurance, HSA) appear before tax calculations, reducing your taxable income. Post-tax deductions (Roth 401k, life insurance, union dues) come out after taxes. Review these carefully each period to ensure they match your elections.

Section 5: Net Pay (Take-Home Pay)

The bottom line: Net Pay = Gross Pay − All Taxes − All Deductions. This is the amount deposited into your bank account or printed on your check. It should match your bank deposit exactly.

Section 6: Year-to-Date (YTD) Totals

Most pay stubs include cumulative totals for the calendar year. These YTD figures are essential for tracking whether you are on pace with your tax liability, monitoring your progress toward the Social Security wage cap ($176,100), and verifying your W-2 at year-end.

💡 Pro tip: Save your final pay stub of each year and compare it to your W-2 when it arrives in January. The YTD figures on your last stub should closely match the amounts on your W-2. Discrepancies may indicate a payroll error that could affect your tax return.

Frequently Asked Questions

What is the most important line on my pay stub?

Net pay (take-home pay) is the bottom line - the amount deposited into your bank account. However, regularly reviewing your gross pay, tax withholdings, and deductions ensures accuracy and helps you optimize your finances.

Why does my federal tax withholding change?

Federal tax withholding can change due to pay increases, bonus payments, changes to your W-4 form, or when you cross tax bracket thresholds. Changes in pre-tax deductions (like increasing your 401k contribution) also affect withholding.

What does YTD mean on my pay stub?

YTD stands for Year-to-Date. It shows cumulative totals for each line item (earnings, taxes, deductions) from January 1 through the current pay period. YTD totals help you track annual progress and verify your W-2.

How do I know if my paycheck is correct?

Multiply your hourly rate by hours worked (or check salary divided by pay periods) to verify gross pay. Then confirm each deduction matches your elections. Compare net pay to your bank deposit. If anything seems off, contact your payroll department.

Common Pay Stub Abbreviations Explained

Pay stubs use abbreviations that can be confusing. Here is a comprehensive reference:

Abbreviation	Meaning	Type
FWT / FIT	Federal Withholding Tax / Federal Income Tax	Pre-tax deduction
SWT / SIT	State Withholding Tax / State Income Tax	Pre-tax deduction
OASDI / SS	Old Age, Survivors, and Disability Insurance (Social Security)	Pre-tax deduction
MED / HI	Medicare / Hospital Insurance	Pre-tax deduction
SDI / VDI	State Disability Insurance	Pre-tax deduction
401K / ROTH	401(k) contribution / Roth 401(k) contribution	Pre-tax / Post-tax
HSA / FSA	Health Savings Account / Flexible Spending Account	Pre-tax deduction
GTL	Group Term Life Insurance (taxable portion above $50k coverage)	Imputed income
YTD	Year-to-Date (cumulative totals)	Running total

Red Flags to Watch For on Your Pay Stub

Review every pay stub for these common errors that cost American workers billions annually:

Missing overtime: Check that hours over 40/week are paid at 1.5x your regular rate, not your standard rate.
Wrong filing status: If your W-4 shows "Single" but you filed as "Married," you are over-withholding federal tax.
Incorrect state: Remote workers may be taxed in the wrong state. Your pay stub should reflect your state of residence.
Phantom deductions: Verify every deduction line matches your benefit elections. Unauthorized deductions are illegal.
Missing employer match: While not shown on your pay stub, verify your 401(k) account reflects your employercdots match.