How to Read Your Pay Stub — and Catch Mistakes

The gap between what you earn and what lands in your bank account is where taxes, insurance, and your retirement plan all take their cut — and most people have never once verified that any of those cuts are correct. Payroll systems are automated, but the humans configuring them make mistakes: wrong withholding status, a benefit deduction that didn't stop when you dropped the plan, overtime paid at straight time. Nobody catches these for you.

So here's every line on a standard pay stub, in plain English, followed by the specific errors worth checking for. Ten minutes with one stub, once, and then a thirty-second scan each payday.

The top of the stub: the four framing numbers

• Gross pay: everything you earned this period before anything comes out — salary for the period, or hours times rate, plus overtime, bonuses, and commissions.
• Net pay: what actually hits your account. Gross minus every deduction below.
• Pay period: the dates this check covers. Note that it usually lags — a check dated the 15th often covers the last two weeks of the prior month.
• YTD (year-to-date) columns: running totals since January 1 for every line. These are how you catch slow leaks, and they should reconcile with your W-2 in January.

Taxes: the biggest bites

• Federal income tax withholding: based on your Form W-4. Since the 2020 redesign there are no more "allowances" — the form works off filing status, dependents, and other income. If your life changed (marriage, kid, second job) and your W-4 didn't, this number is probably wrong in one direction or the other.
• Social Security (often labeled OASDI or FICA-SS): a flat 6.2% of gross wages, up to an annual wage cap that adjusts each year (in the high $170,000s recently — SSA.gov has the current figure). Your employer quietly pays a matching 6.2% on top.
• Medicare (FICA-Med): 1.45% of all wages, no cap, plus an extra 0.9% on high incomes (above $200,000 for a single filer). Employer matches the 1.45%.
• State income tax: varies from zero (Texas, Florida, Washington, Nevada, and a handful of others tax no wage income) to double digits in the highest-tax states.
• Local taxes: some cities and counties — New York City, Philadelphia, much of Ohio and Pennsylvania — take their own slice. If you moved and your employer still withholds for the old city, that's an error costing you real money.
• State disability or family-leave insurance (SDI, PFL, and similar acronyms): small percentages required in states like California, New York, New Jersey, and Washington.

Pre-tax vs. post-tax deductions — the distinction that saves you money

A pre-tax deduction comes out before your taxes are calculated, so it shrinks your taxable income; a $200 pre-tax deduction really only costs you about $150 in take-home if you're in the 22% bracket plus FICA. Post-tax deductions give no such discount. Your stub should make clear which is which:

• Usually pre-tax: health, dental, and vision premiums; traditional 401(k) or 403(b) contributions; HSA and FSA contributions; commuter benefits.
• Usually post-tax: Roth 401(k) contributions (taxed now, tax-free later — that's the deal), supplemental life insurance, disability premiums at some employers, union dues.
• A subtle good-to-know: paying disability premiums post-tax means disability benefits arrive tax-free if you ever need them. Pre-tax premiums make the benefit taxable.
• Employer-paid items sometimes appear in an "employer contributions" or memo section — 401(k) match, employer HSA money, imputed income for group life insurance over $50,000. They don't reduce your check; they're there for transparency (and the life-insurance imputed income is actually added to your taxable wages).

Garnishments and everything else

Child support, tax levies, defaulted-loan garnishments, and court-ordered wage assignments show up as their own lines. Federal law caps most consumer-debt garnishments at 25% of disposable pay. If a garnishment appears that you don't recognize, contact payroll the same day — clerical mix-ups between employees with similar names genuinely happen, and they're miserable to unwind after months.

The seven errors worth actively checking for

1. Hours and rate, if you're hourly. Compare stub hours against your own record for one full pay period. Overtime must be at least 1.5 times your regular rate for hours over 40 in a week; "we pay straight time for overtime" is illegal for non-exempt workers, full stop.
2. Withholding sanity check. Run the IRS Tax Withholding Estimator at irs.gov once a year (spring is ideal). It compares your actual withholding to your projected tax and tells you exactly how to adjust your W-4 — the fix for both surprise tax bills and oversized refunds, which are just interest-free loans to the government.
3. Benefit deductions match your elections. Pull up your open-enrollment confirmation and compare plan by plan. Deductions for dropped plans have a way of continuing.
4. 401(k) contributions actually arriving. Your percentage times gross should equal the deduction, the money should appear in your retirement account within days, and the match should follow the plan's formula. YTD columns catch a contribution that quietly stopped.
5. State and local taxes match where you live and work now, not where you lived when hired. Remote workers: this one's for you.
6. Social Security number and name are exactly right. A wrong SSN means your earnings aren't being credited to your Social Security record — a retirement-benefits problem you want to find now, not at 67.
7. The math itself. Gross minus every listed deduction should equal net, to the penny. It almost always does; the one time it doesn't, you'll be glad you checked.

Found a mistake? Here's the sequence

Email payroll or HR with the specific line, the specific pay periods affected, and what you believe it should be — writing creates the record. Employers can correct errors and owe you back pay for underpayments; most fix things within a cycle or two once asked. If you were overpaid, flag it anyway: they're generally entitled to claw it back, and it's far better on your terms than as a surprise deduction. If underpaid wages go unfixed, your state's labor department takes wage claims for free, and the federal Department of Labor's Wage and Hour Division covers overtime violations. Keep your stubs (or download them, since portals close when you leave a job) for at least a year — they're your evidence, and you'll want the final one to check your W-2 anyway.