Understanding your pay stub
What you'll learn
Read a US pay stub and tell gross from net, and know what each deduction is.
Your pay stub shows two numbers that matter most: gross pay (what you earn) and net pay (what you keep). Everything in between is a tax or a deduction, and knowing what each one is stops payday surprises.
The five things to find
- Gross pay - your full earnings before anything comes off.
- Federal income tax - withheld based on your W-4 form, income and filing status.
- State income tax - varies by state; a handful of states charge none at all.
- FICA - the payroll tax for Social Security and Medicare. As of 2026 the employee share is 6.2% for Social Security (up to an annual wage cap) plus 1.45% for Medicare, and your employer pays the same again. Check current rates on irs.gov.
- 401(k) - your own retirement saving, often matched by your employer. A traditional 401(k) contribution also lowers the pay your income tax is calculated on.
What is left after all of that is your net pay, the take-home figure.
A simple breakdown
| Line on pay stub | What it means | Whose money |
|---|---|---|
| Gross pay | Total earnings before deductions | Earned |
| Federal and state tax | Income tax withheld as you earn | To the IRS and your state |
| Social Security and Medicare | FICA payroll taxes | Funds federal benefits |
| 401(k) | Saving for retirement | Stays yours |
| Net pay | What hits your bank | Yours now |
Worth a quick check
- Review your W-4 after any big life change (marriage, second job, new dependant) so withholding stays roughly right.
- Confirm 401(k) contributions are going in, especially if your employer offers a match.
- Watch for one-off lines like overtime, bonuses or health insurance premiums.
Tax rates, brackets and the Social Security wage cap change over time, so treat the chart above as illustrative and check current figures on irs.gov.
Key takeaways
- Gross pay is what you earn, net pay is what you keep.
- Federal and state withholding are estimates driven by your W-4; the final bill is settled at tax time.
- FICA funds Social Security and Medicare, and your employer pays a matching share.
- A 401(k) deduction is still your money, saved for later and often matched.
Illustrative only: a made-up split for a single filer, showing the shape of a pay stub rather than real rates. Federal and state withholding depend on your W-4, income and state; the 401(k) line is a choice, not a tax. Check current tax rates on irs.gov. Not a forecast.
Frequently asked questions
What is the difference between gross and net pay?
Gross pay is what you earn before anything is taken off. Net pay is what actually lands in your bank account after taxes and other deductions.
What is FICA?
FICA is the payroll tax that funds Social Security and Medicare. As of 2026 the employee share is 6.2% for Social Security (up to an annual wage cap) and 1.45% for Medicare, and your employer pays a matching amount. Rates and the cap can change, so check the current figures on irs.gov.
Why does my federal withholding look different from a friend's?
Withholding follows the W-4 form you gave your employer, plus your income and filing status. Two people on the same salary can have different withholding, and the true bill is only settled when you file your tax return.
Is a 401(k) deduction money lost?
No. A 401(k) deduction is your own money going into your retirement account, often with an employer match on top. It leaves your pay stub but it is still yours.
General information, not financial advice. The value of investments can fall as well as rise, and figures and rules can change; check the current position before acting.