How to read a paystub, line by line
7 min read
A stub is four blocks: who, when, what you earned, and what was taken out. Once you know which block you are in, the numbers stop being intimidating.
The header
Employer name, address and often the EIN; employee name, address, an employee number and the last four digits of the Social Security number. A full SSN should not appear on a stub — several states prohibit it, and no verifier needs it.
The period block
Two dates that bracket the work, and a third — the pay date — when the money moved. They are not interchangeable. A period ending 21 August paid on 28 August belongs to the tax year of the pay date, not the work date, which is why late-December periods land in January's totals.
Earnings
Each earning type gets its own line with a rate, a quantity and an amount: regular hours, overtime at 1.5×, double time, bonus, commission, tips, holiday and PTO. Add them and you have gross pay — the number people quote and almost never receive.
Pre-tax deductions
Health premiums, HSA and FSA contributions, traditional 401(k) deferrals and commuter benefits come out before tax is calculated, which is why they reduce your withholding as well as your pay. Gross minus these is your taxable wage, and it is the figure the tax lines are computed from.
Taxes
Four lines, usually. Federal income tax, which depends on your W-4 and your annualized pay. Social Security at 6.2% of wages up to the annual wage base, after which the line stops for the rest of the year. Medicare at 1.45% with no cap, plus an additional 0.9% on high earnings. Then state income tax where the state levies one, and sometimes a city or county line on top.
Post-tax deductions
Roth 401(k), union dues, wage garnishments, loan repayments and charitable giving. These come out of money that has already been taxed, so they shrink your deposit without shrinking your tax.
Net pay and year to date
Net pay is what reaches your account. The year-to-date column beside every line is the running total for the calendar year — the part a lender reads most closely, because it reveals whether the current period is typical. Two consecutive stubs should differ in YTD by exactly the current-period amounts. If they do not, something is wrong, and it is worth finding out what before anyone else does.