A pay stub is four sections and one equation. The sections are earnings, taxes, deductions and year to date. The equation is what lets you check the whole thing in under a minute, and once you have it the labels stop mattering.
The equation
Gross to net
gross − pre-tax deductions − taxes − post-tax deductions = net pay
It ties out to the cent, every time. If yours does not, you have either missed a line or found a problem.
That is the whole thing. Everything below is what goes in each bucket and which numbers are worth looking at twice.
A whole stub, line by line
Someone on $65,000 in California, paid every two weeks, single, putting $150 a period into a 401(k) and $100 into a health plan:
| Line | Amount | What it is |
|---|---|---|
| Gross pay | $2,500.00 | Everything earned this period, before anything comes off |
| 401(k) | − $150.00 | Pre-tax for income tax only, not for FICA |
| Health premium | − $100.00 | Pre-tax for income tax and FICA both |
| Federal income tax | − $186.00 | An estimate, set by your W-4 |
| Social Security | − $149.00 | 6.2%, not an estimate |
| Medicare | − $35.00 | 1.45%, not an estimate |
| CA income tax | − $72.00 | State, also an estimate |
| CA SDI | − $31.00 | A state insurance contribution, not a tax |
| Net pay | $1,777.00 | 71% of gross |
Two things in that table are worth a second look, and they are the two that cause the most confusion.
- Social Security was not 6.2% of $2,500. It is 6.2% of $2,400, because the health premium came out before FICA was figured. $148.80, shown as $149.
- The 401(k) did not change it at all. A retirement deferral reduces income tax and nothing else, so it never touches the Social Security or Medicare lines. Those two deductions sit on different wage bases and that is why payroll lists them separately.
The earnings section
Every line here is either hours multiplied by a rate, or a flat amount. Regular pay, overtime, PTO you took, holiday pay, shift differential, a bonus, a commission. Salaried stubs often show a single figure and no hours at all.
The line worth checking is overtime, because the rate is not simply 1.5 times your base hourly rate when you have earned a shift differential or a non-discretionary bonus in the same week. The overtime calculator works out what the rate should have been.
The tax section
The single most useful distinction on a pay stub is that some of these are estimates and some are not.
- Federal and state income tax are estimates. They move with your W-4, and they are trued up when you file. A refund means too much was estimated. FIT is the federal one.
- Social Security and Medicare are not. The 6.2% and 1.45% are the amounts, full stop, and nothing you put on a W-4 changes them. Together they are FICA. OASDI is the Social Security line, and Fed MED/EE and Fed MWT/EE are both the Medicare one.
- A local line may appear and it varies enormously. Twenty-four Michigan cities levy one, New York City charges residents only, and Pennsylvania has a flat weekly local services tax that is not income tax at all.
- A state insurance contribution is not a tax. California SDI is the common one and it buys you something.
Why pre-tax and post-tax deductions are listed apart
Because they reduce different things, and grouping them would hide it.
- Section 125 items, meaning health premiums, an FSA and usually a payroll HSA, come out before income tax and before FICA.
- A traditional 401(k) or 403(b) comes out before income tax only. What a 401(k) actually costs your paycheck puts numbers on the difference.
- Post-tax items, meaning a Roth 401(k), union dues, a garnishment or a repayment plan, come out of what is left after everything else. They reduce your net and nothing else.
The year-to-date column is the most useful part, and the least read
Most people read the current column and ignore the one beside it. The YTD column is where the errors are visible and where the planning happens.
- It tells you when Social Security will stop. The 2026 wage base is $184,500, so YTD gross tells you how close you are and roughly which month your paychecks get bigger.
- It tells you whether you will hit the 401(k) limit early. $24,500 in 2026. Hitting it in October stops your contributions, and with them any match that only lands when you contribute.
- It catches a wrong rate before it compounds. A deduction set up incorrectly repeats every period, and the YTD figure is where a small error becomes an obvious one.
- Your last stub of the year should agree with your W-2. If the YTD gross and the boxes do not line up, ask before you file rather than after. Your YTD 401(k) should match Box 12 code D exactly.
Checking a stub in under a minute
- Subtract everything from gross and confirm it lands on net.
- Take gross, subtract any health or FSA line, and multiply by 1.45%. That is Medicare. Do it again at 6.2% for Social Security.
- Check the hours on the earnings lines against what you worked.
- Glance at the YTD column and see whether anything is running ahead of where it should be.
The take-home pay calculator builds the same stub for your state and your numbers, which is the quickest way to see whether yours is right.
Frequently asked
Start with one equation: gross minus pre-tax deductions minus taxes minus post-tax deductions equals net pay. It ties out to the cent. Once it does, work through the four sections, which are earnings, taxes, deductions and the year-to-date column beside them.
Between pre-tax deductions, federal and state income tax and the 7.65 percent for Social Security and Medicare, keeping around 70 to 75 percent of gross is normal. On $65,000 in California with a 401(k) and a health premium, $2,500 of gross leaves $1,777.
Because Section 125 deductions come out first. A health premium, an FSA and usually a payroll HSA are subtracted before Social Security and Medicare are figured, so divide by gross minus those. A 401(k) contribution is the exception and does not reduce them at all.
A pre-tax deduction reduces the wages your tax is calculated on. A post-tax one comes out of what is left. They are listed separately because they reduce different things: health premiums come out before income tax and FICA, a traditional 401(k) before income tax only, and a Roth 401(k) or a garnishment after everything.
Year to date, meaning the running total for the calendar year. It is the most useful part of the stub: it shows how close you are to the $184,500 Social Security wage base, whether you will hit the $24,500 retirement limit early, and it is what your W-2 should agree with at the end of the year.
Check first that you have included every line, including any post-tax deduction listed further down. If it still does not tie out, or if Medicare is not 1.45 percent of gross less your Section 125 deductions, take it to payroll. An error set up wrongly repeats every period, so the sooner it is caught the smaller it is.