How to Read a Pay Stub: Every Line, Explained
Most people glance at the net number and move on. That's why they can't tell whether their withholding is wrong, their benefits are mispriced, or their employer is shorting their overtime. A pay stub has about a dozen lines, and each one can be checked in under a minute.
Gross pay and net pay
Gross is the number before anything comes off. Net — the one you see land in your account — is gross minus statutory deductions, minus benefits, minus anything else. Statements that only show net are hiding information you're entitled to.
Statutory deductions
Federal income tax, state income tax, Social Security, and Medicare. Withholding is an estimate, not a bill. If you consistently overpay, adjust the W-4 rather than waiting for a refund — a refund is a zero-interest loan you gave the government.
| Line | Can you change it? |
|---|---|
| Federal withholding | Yes — file a new W-4 |
| State withholding | Usually yes |
| Social Security (6.2%) | No |
| Medicare (1.45%) | No |
| Health premium | Yes — during open enrollment |
| 401(k) deferral | Yes — usually any payroll cycle |
The deferred-looking deductions
A 401(k) contribution is not a cost; it's an asset transfer. $200 into the 401(k) is still your money. People see it as lost income and reduce the contribution to fix a 'tight month' — that's a permanent pay cut.
Overtime and hours
Check hours against the rate. Non-exempt employees generally get 1.5× above 40 hours in a week (some states differ daily). If your stub shows 44 hours at straight time, that's not a rounding issue, it's an error worth raising.
The mistakes that cost people money
- Never comparing gross annualised against the offer letter.
- Treating the refund as a bonus rather than a signal that withholding is set too high.
- Ignoring the benefits line until an open enrollment window has passed.
- Assuming overtime exemptions apply when the job is actually time-based.
Common questions
How often can I change withholding?
Any time — submit a new W-4 to payroll. Changes usually take effect the next cycle.
Is a pay stub legally required?
In most US states yes, and in plenty of countries it's mandatory. If you can't get one, ask payroll in writing.