How to Read a Pay Stub

Q: What does FICA mean on my pay stub?

FICA stands for Federal Insurance Contributions Act. It covers two taxes: Social Security (6.2% of your wages up to $184,500 in 2026) and Medicare (1.45% with no cap, plus an additional 0.9% on wages above $200,000). Together they total 7.65% for most workers.

Q: Why doesn't my net pay match gross minus taxes?

Because deductions also come out of your paycheck. Pre-tax deductions like 401(k) contributions, HSA, and health insurance premiums are subtracted before taxes are calculated. After-tax deductions like Roth 401(k), union dues, and garnishments are subtracted after taxes. Both reduce your net pay beyond just the tax lines.

Q: What are YTD totals for?

YTD (year-to-date) totals show running sums of your earnings, taxes, and deductions since January 1. They are critical for tracking when you hit the Social Security wage cap ($184,500 in 2026) or the Additional Medicare threshold ($200,000), both of which change your withholding mid-year.

Read a pay stub in this order: gross pay, pre-tax deductions, federal withholding, Social Security and Medicare, state and local taxes, after-tax deductions, then net pay. If net pay looks wrong, the explanation is almost always in one of those lines or in the year-to-date totals beside them.

Gross pay shows what you earned, the tax lines show what payroll withheld, and the deduction lines show what came out before or after tax. Once you know that order, most pay stubs become much easier to diagnose.

What Should You Look at First on a Pay Stub?

Start with gross pay and the pay-period dates, then work downward through taxes and deductions. If gross pay is correct, the next place to look is whichever withholding or deduction line changed the most from the prior pay period.

Employee Information

The top section identifies you and the pay period. You'll typically see your name, employee ID, department, and the pay period start and end dates. Double-check these — especially the dates. If the pay period is wrong, everything below it could be off. You may also see your pay date (when the money hits your account), which can be a few days after the period ends.

Earnings (Gross Pay)

This is the total amount you earned before anything is taken out. How it's calculated depends on how you're paid:

Hourly workers: Regular hours × hourly rate, plus overtime hours × hourly rate × overtime multiplier (usually 1.5x for time-and-a-half). If you worked 80 regular hours at $20/hr and 10 overtime hours, your gross is (80 × $20) + (10 × $20 × 1.5) = $1,600 + $300 = $1,900.
Salaried workers: Your annual salary divided by the number of pay periods per year. A $52,000 salary on a biweekly schedule (26 periods) is $2,000 per paycheck. This amount stays the same every period unless you have a bonus, commission, or other supplemental pay added.

Some stubs break earnings into separate lines: regular pay, overtime, holiday pay, shift differential, bonus, commission. Each line shows the rate and hours (or flat amount) so you can verify the math.

Federal Income Tax Withholding

This line shows how much federal income tax your employer withheld for the pay period. The amount comes from IRS Publication 15-T — your employer takes your taxable wages for the period, annualizes them (multiplies by the number of pay periods per year), looks up the result in the federal bracket tables, calculates the annual tax, then divides back down to a per-period amount.

Your W-4 form controls this number. Filing status, the Step 2 checkbox, dependent credits, additional income, deductions, and extra withholding all feed into the calculation. If this line seems too high or too low, your W-4 is the first place to look. For details on how each W-4 field affects withholding, see the paycheck glossary.

FICA Taxes: Social Security and Medicare

FICA stands for the Federal Insurance Contributions Act. It funds Social Security and Medicare and appears as two separate lines on most pay stubs:

Social Security: 6.2% of your wages, up to the annual wage base cap of $184,500 in 2026. Once your year-to-date wages exceed this cap, Social Security tax stops being withheld for the rest of the year. Your employer also pays a matching 6.2% — you only see your half on the stub.
Medicare: 1.45% of all wages, with no cap. Your employer matches this too. If your year-to-date wages exceed $200,000, an additional 0.9% Medicare tax (called Additional Medicare Tax) kicks in on every dollar above that threshold. Your employer does not match the additional 0.9%.

Combined, FICA takes 7.65% of each paycheck for most workers (6.2% + 1.45%). This is a flat rate — there are no brackets or deductions that reduce it, except for certain pre-tax deductions like HSA and Section 125 cafeteria plan contributions.

State and Local Taxes

If your state has an income tax, you'll see a state withholding line. The amount depends on your state's tax brackets and your state W-4 (or equivalent form). Some states also have supplemental taxes — for example, California withholds State Disability Insurance (SDI) at a separate rate.

If you live or work in a city or county with a local income tax, you may see an additional local tax line. Not all jurisdictions have this, but major cities like New York City, Philadelphia, and others do.

States like Texas, Florida, and a handful of others have no state income tax, so this section will be blank on your stub.

Pre-Tax Deductions

Pre-tax deductions are subtracted from your pay before taxes are calculated. This means they reduce your taxable income, saving you money on taxes. Common pre-tax deductions include:

Traditional 401(k): Reduces your federal and state taxable income, but not your FICA taxable income. If you contribute $200 per paycheck to a traditional 401(k), your federal and state taxes are calculated on $200 less — but Social Security and Medicare are still calculated on the full amount.
HSA (Health Savings Account): Reduces federal, state, and FICA taxable income. HSA contributions through payroll are exempt from all employment taxes, making them one of the most tax-efficient deductions available.
FSA and Section 125 cafeteria plans: Like HSA, these reduce all three: federal, state, and FICA. Health insurance premiums paid through your employer's cafeteria plan also fall into this category.

The key distinction is the tax treatment. Understanding whether a deduction is “exempt from all” or “exempt from federal and state only” determines how much it actually saves you. For a deeper look, see our guide on how deductions affect your paycheck.

After-Tax Deductions

After-tax deductions come out of your pay after taxes have been calculated. They reduce your net pay but do not reduce your taxable income. Common after-tax deductions include:

Roth 401(k): Contributions are made with after-tax dollars. You pay taxes now, but withdrawals in retirement are tax-free. Unlike traditional 401(k), Roth contributions do not reduce any of your taxable income — federal, state, or FICA.
Union dues: Deducted after taxes are calculated.
Wage garnishments: Court-ordered deductions for child support, debt, or other obligations. These are taken after taxes.

Net Pay

The bottom line. Net pay is what actually hits your bank account (or what your paper check is written for). The formula:

Net Pay = Gross Pay − Pre-Tax Deductions − Federal Tax − FICA − State/Local Tax − After-Tax Deductions

If you're looking at your stub and the math doesn't seem to add up, remember that pre-tax deductions come out before taxes are calculated. So you can't just subtract all the tax and deduction lines from gross and expect to get net. The order matters.

YTD (Year-to-Date) Totals

Most pay stubs include a YTD column next to each line — a running total since January 1 of the current year. These totals are more than just record-keeping:

Social Security cap tracking: Once your YTD wages hit $184,500 (in 2026), Social Security tax stops. Watch your YTD to know when this kicks in — your take-home pay will jump.
Additional Medicare threshold: When YTD wages cross $200,000, the additional 0.9% Medicare tax starts. Your take-home pay drops slightly at that point.
Retirement contribution limits: The YTD on your 401(k) line tells you how much you've contributed toward the annual limit.
Tax return preparation: At year-end, your YTD totals should match your W-2. If they don't, flag it with your employer before tax filing season.

What TakeHome IQ Tracks

Every section of your pay stub maps directly to what TakeHome IQ calculates and displays: gross pay, federal tax withholding, Social Security and Medicare (shown separately), state tax, deductions broken down by category and tax treatment, and net pay. The app's audit trail shows every intermediate step, so you can verify the calculation matches your stub line by line.

TakeHome IQ also includes a pay stub scanner. Take a photo of your stub, and the app extracts the key numbers — gross pay, each tax line, deductions, and net pay — so you can compare them against the app's calculation. If something doesn't match, you know exactly which line to investigate.

Scan Your Pay Stub

Don't want to decode every line yourself? Scan your pay stub with TakeHome IQ and we'll break it down for you — showing what each number means, whether the withholding looks right, and where your money goes. Check out our home page or the guides hub for more paycheck resources.

Frequently Asked Questions

What does FICA mean on my pay stub?

FICA stands for the Federal Insurance Contributions Act. It covers two payroll taxes: Social Security (6.2% up to $184,500 in 2026) and Medicare (1.45% with no cap, plus 0.9% above $200,000). Together they take 7.65% of most paychecks. Both you and your employer pay FICA — your stub shows only your half.

Why doesn't my net pay match gross minus taxes?

Because deductions also reduce your pay. Pre-tax deductions (traditional 401k, HSA, health premiums) come out before taxes are calculated, reducing both your taxable income and your cash pay. After-tax deductions (Roth 401k, union dues, garnishments) come out after taxes. Both layers sit between gross pay and net pay, so simply subtracting the tax lines from gross won't give you the right answer.

What are YTD totals for?

YTD (year-to-date) totals are running sums since January 1. They track your progress toward annual limits — like the Social Security wage cap ($184,500 in 2026) and the Additional Medicare threshold ($200,000). When you cross these thresholds, your withholding changes mid-year. YTD totals also help you verify your year-end W-2 is accurate.