A pay stub explains how your paycheck was calculated. It shows what you earned, what was withheld, what was deducted, and what you actually received.
Don’t ignore it. Pay stubs are how you catch mistakes, wrong hours, bad deductions, missing overtime, before they become bigger problems.
Gross Pay
Gross pay is your pay before taxes and deductions.
For hourly workers, it may show:
- Hours worked
- Hourly rate
- Overtime hours and overtime rate (usually 1.5x your regular rate)
- Bonuses or commissions, if applicable
- Shift differentials, if your employer pays more for nights or weekends
For salaried workers, it shows the salary amount for that pay period. If you earn $52,000 per year and are paid biweekly, each pay period’s gross pay would show approximately $2,000.
Understanding the difference between gross and take-home pay matters for budgeting. See Gross Pay vs Take-Home Pay for a full explanation.
Taxes Withheld
Your stub may show withholding for:
- Federal income tax, the amount sent to the IRS on your behalf, based on your W-4
- State income tax, applies in most but not all states
- Local taxes, cities and counties in some states charge their own income tax
- Social Security, a fixed percentage taken from your wages up to an annual limit
- Medicare, a fixed percentage with no annual cap
Withholding is money taken out and sent toward taxes. It’s an estimate, not the final amount you owe. When you file your tax return, you settle up: too much withheld means a refund, too little means you owe the difference.
The amount withheld for federal income tax is controlled partly by your W-4 form. If you think too much or too little is being withheld, that is where to look.
Benefits And Other Deductions
Common deductions include:
- Health insurance premiums, your share of monthly medical, dental, and vision coverage
- Retirement contributions, your 401(k), 403(b), or other workplace retirement plan contributions
- HSA or FSA contributions, pre-tax savings for healthcare expenses
- Union dues, required for union members
- Wage garnishments, court-ordered payments for debts, child support, or back taxes
- Life or disability insurance premiums, voluntary or employer-provided coverage
- Other voluntary deductions, transit passes, parking benefits, employee stock purchase plans
Some deductions happen before taxes are calculated (pre-tax). Others happen after (post-tax). Pre-tax deductions lower your taxable income, which can reduce the amount of income tax withheld. Your employer or payroll system may label these clearly, or you may need to check your benefits enrollment records to find out which is which.
Net Pay
Net pay is what you actually receive after taxes and deductions. Sometimes called take-home pay.
Use this number when budgeting for monthly bills. If your gross pay is $2,500 and your total taxes and deductions add up to $700, your net pay is $1,800. That’s what lands in your bank account.
Year-To-Date Totals
Pay stubs often show year-to-date (YTD) totals, cumulative amounts from January 1 through your most recent paycheck:
- Total gross earnings for the year
- Total federal and state taxes withheld
- Total Social Security and Medicare paid
- Total benefits deductions
- Total retirement contributions
YTD numbers help you check whether you’re on track. If you planned to contribute $5,000 to your 401(k) this year, your YTD retirement column tells you where you stand. They also help you cross-check your W-2 at tax time, the YTD federal tax withheld on your last pay stub of the year should match Box 2 on your W-2. If this is your first return, see How To File Income Taxes For The First Time.
What To Check Every Pay Period
Review these each time you get paid:
| Item | What to look for |
|---|---|
| Pay rate | Matches your agreed rate or salary |
| Hours | Accurate for the pay period |
| Overtime | Included if you worked over 40 hours |
| Tax withholding | Looks roughly consistent with prior stubs |
| Health insurance deduction | Matches the plan you enrolled in |
| Retirement contribution | Correct percentage or dollar amount |
| PTO balance | Accurate if shown on your stub |
| Net pay | Matches your direct deposit |
If something looks wrong, bring it up quickly. Payroll errors can be fixed, but catching them early is much easier than correcting months of bad pay. Contact HR or payroll with the specific pay period and the number that looks off.
Frequently Asked Questions
Q: What is the difference between gross pay and net pay on a pay stub?
Gross pay is what you earned before any deductions. Net pay is what you actually receive after taxes and all other deductions are removed. Net pay is always equal to or less than gross pay, and for most workers, it’s noticeably lower than gross.
Q: Why does my paycheck vary even when my pay rate stays the same?
Hourly workers see variation based on hours worked each pay period, including overtime. Salaried workers can also see variation if benefits elections change, tax withholding adjusts, or one-time items like bonuses or garnishments appear. Check the earnings and deductions sections of your stub to find the source of any change.
Q: What should I do if my pay stub shows an error?
Contact your HR department or payroll team as soon as possible. Provide the specific pay period date and the item you believe is incorrect, and keep a copy of the stub. Most employers can correct payroll errors, but the sooner you report them, the simpler the fix.
Q: Do I need to keep my old pay stubs?
Keep them for at least a year. They help you verify your W-2 at tax time, catch errors, and prove your income if you apply for a loan, rental, or government benefit. Many employers store digital stubs through a payroll portal, but downloading your own copies is a smart habit.
Learn More
- IRS: Understanding your W-2
- CFPB: Understanding your paycheck
- Department of Labor: Wages and the Fair Labor Standards Act