Pay stub: what it is and how to read each line

What a pay stub is

Cambridge Dictionary defines a pay slip, which is its other name for a pay stub, as a piece of paper given to an employee to show how much they have earned and any deductions in a particular period. Today it is usually a page in your employer's payroll portal.

It matches a deposit in your account to the pay that produced it, so you can tell where the missing money went.

How to read a pay stub

Read it top to bottom. Gross pay is first: hours times rate, or your salary for the period. Then come the taxes: federal income tax, Social Security and Medicare (6.2% and 1.45% of your pay, as in IRS Topic 751), and state tax where there is one. Then the deductions you chose, such as health insurance or a 401(k). Last is net pay, the amount deposited.

Most stubs also show year-to-date totals. Those are useful when you fill in a form, and for checking that your 401(k) is on track.

What to check each time

Check the pay period dates, the gross against what you were promised, and the net against the deposit. Check that the withholding looks right. If you changed your Form W-4 recently, make sure your pay moved the way you expected.

Save a copy of each stub as a PDF. A couple can keep both in one shared folder.

A worked example: reading one stub

• Gross pay for the period: $2,500.00.
• Social Security (6.2%): $155.00.
• Medicare (1.45%): $36.25.
• Federal income tax withheld: about $216.
• Net pay: $2,500.00 - $155.00 - $36.25 - $216 = about $2,093 before state tax. That is the deposit.