You worked hard all week. Direct deposit hits. You glance at the number in your bank account and move on. Sound familiar?
Most people never actually read their pay stub. But buried in those lines are answers to questions you didn't know you had: why your paycheck shrank after a raise, why December paychecks sometimes look different, and whether your employer is withholding the right amount.
Let's walk through every line, top to bottom.
Gross Pay
Gross Pay is the big number at the top: what you earned before anything gets taken out. If you're salaried, this is your annual salary divided by the number of pay periods. If you're hourly, it's your rate multiplied by the hours you worked. This is the number your employer agreed to pay you, but it's not the number you take home.
Federal Income Tax
Federal Income Tax is usually the biggest deduction. The amount withheld depends on what you put on your W-4 form when you were hired. It's calculated using progressive tax brackets, meaning different portions of your income are taxed at different rates. A common misconception is that a raise "puts you in a higher tax bracket" and costs you money. It doesn't. Only the income above each threshold is taxed at the higher rate.
Social Security Tax (OASDI)
Social Security Tax (OASDI) takes 6.2% of your gross pay up to the wage base limit ($168,600 in 2025). Your employer pays a matching 6.2% on top of that. Once you hit the cap, this deduction disappears from your remaining paychecks for the year, which is why high earners sometimes see bigger paychecks in November and December.
Medicare Tax
Medicare Tax takes 1.45% of your gross pay with no cap. If you earn over $200,000 individually, an additional 0.9% kicks in on the excess.
State Income Tax
State Income Tax varies wildly. Nine states charge nothing. California can take over 13%. Your stub will show the amount withheld based on your state's rates and your W-4 selections.
Pre-Tax Deductions
Pre-Tax Deductions come out before taxes are calculated, which lowers your taxable income. Common ones include 401(k) contributions, health insurance premiums, HSA contributions, and commuter benefits. These are your biggest lever for reducing your tax bill. Every dollar you put into a 401(k) is a dollar that isn't taxed this year.
Post-Tax Deductions
Post-Tax Deductions come out after taxes. These include Roth 401(k) contributions, life insurance premiums, garnishments, and union dues. They don't reduce your current tax bill, but Roth contributions grow tax-free.
Net Pay
Net Pay is the bottom line: what actually lands in your bank account. It's your gross pay minus every deduction above. This is the number most people focus on, but understanding everything above it gives you the power to change it.
Want to see how all these pieces fit together for your specific situation? Try our Gross to Net Calculator. Plug in your salary and watch each deduction line up.
One thing to check right now: Pull up your most recent pay stub and compare your federal withholding to what you actually owed last April. If you got a big refund, you're giving the government an interest-free loan. If you owed a lot, you might want to adjust your W-4. Either way, understanding your stub puts you in control. You can also use our Paycheck Calculator to estimate whether your current withholding is on track.