How to Read Your Pay Stub (2026)

Nobody is federally required to give you one

Start with the fact that reframes everything else on this page: there is no federal right to a pay stub. The Fair Labor Standards Act tells employers what they must record, not what they must deliver. The Department of Labor’s recordkeeping fact sheet lists the complete set — name and Social Security number, address, birth date if under 19, sex and occupation, the day and time the workweek begins, hours worked each day, total hours each workweek, the basis on which wages are paid, the regular hourly rate, total daily or weekly straight-time earnings, total overtime earnings for the workweek, all additions to or deductions from wages, total wages paid each pay period, and the date of payment with the period it covers.

Read that list again and notice what is absent. Fourteen items, every one of them a record the employer keeps in its own files. Not one of them is “furnish a statement to the employee.” The DOL is explicit that the Act “requires no particular form for the records.” Whether you get a stub, and what it must show, comes from your state — which is why a California stub is dense with itemized detail and a stub from a no-statute state can be a single net figure.

The practical consequence: your stub is not a government document with a fixed schema. Two employers can label the same withholding three different ways. What follows is the structure underneath the labels.

The five blocks every stub is built from

However it is laid out, a stub is always the same arithmetic in the same order:

1. Gross pay — everything earned this period before anything is removed: base wages, overtime, shift differentials, commissions, bonuses.
2. Pre-tax deductions — amounts removed before tax is computed: 401(k) or 403(b) elective deferrals, and Section 125 cafeteria-plan items such as health, dental and vision premiums, HSA and FSA contributions.
3. Taxes withheld — federal income tax, Social Security, Medicare, and state and local income tax where they apply.
4. Post-tax deductions — Roth 401(k) contributions, garnishments, union dues, and most state disability or paid-leave contributions.
5. Net pay — what lands in your account.

The order is not cosmetic. It is the reason two deductions of identical size can have completely different effects on your take-home pay, which is the subject of the next section.

Why your 401(k) line cuts one tax and not the other

This is the single most misread line on an American pay stub. Publication 15’s table of special payment types is unambiguous about elective deferrals to a 401(k): for income tax withholding they are “generally exempt,” but for Social Security and Medicare they are “taxable.” Your deferral never touches FICA. Cafeteria-plan benefits under Section 125 sit in a different row and “may qualify for exclusion from wages for social security, Medicare, and FUTA taxes” — which is why your health premium is quietly the more tax-efficient of the two.

Here is what that looks like on an $85,000 salary with $10,000 deferred to a traditional 401(k), computed by this site’s engine rather than written out by hand:

Three things are visible at once. First, the federal saving is identical in all four states — $2,200.00, exactly 22% of the deferral, because the whole $10,000 came off the top of one bracket. Second, the FICA column does not move in a single row. You will pay Social Security and Medicare on that $10,000 this year, and no future event refunds it. Third — and this is the detail almost no calculator models — Pennsylvania gives you nothing at state level either. Pennsylvania taxes elective deferrals when they are made, so the same deferral that saves a Michigan filer $425.00 saves a Pennsylvania filer $0.00.

The rule of thumb worth carrying away: a pre-tax line that lowers Box 1 of your W-2 but leaves Boxes 3 and 5 alone is a retirement deferral; one that lowers all three is a cafeteria-plan benefit. If your stub shows year-to-date federal taxable wages and year-to-date Social Security wages as different numbers, the gap between them is your 401(k), and you can read it straight off the page.

The year-to-date columns, and how to audit them

The YTD column on the right is the only part of a stub you can independently verify, because two of its lines are fixed percentages with no judgment in them. Social Security is 6.2% of wages up to $184,500 in 2026 and nothing above it; Medicare is 1.45% of every dollar with no ceiling whatsoever.

So: divide your YTD Social Security withholding by 0.062. The answer should equal your YTD Social Security wages (or $184,500, whichever is smaller). Do the same with Medicare at 0.0145. If either fails by more than rounding, something on the stub is wrong and it is worth a conversation with payroll this month rather than next April.

Two behaviours in that table catch people out every year. The Social Security line goes flat mid-year for higher earners — at $184,500 the withholding reaches $11,439.00 and simply stops, so a paycheck in November is visibly larger than the same paycheck in March with no raise involved. And Additional Medicare Tax begins at $200,000 regardless of filing status. Publication 15 instructs employers to start withholding it “in the pay period in which you pay wages in excess of $200,000 to an employee,” with no employer share and no adjustment for whether you are married. A dual-income couple can therefore cross the $250,000 joint threshold while neither employer withholds a dollar of it — the shortfall surfaces on the return.

The related trap runs the other way. If you changed jobs mid-year, each employer restarts the $184,500 wage base from zero, so you can be over-withheld through no one’s error. The IRS treats the two cases differently: with more than one employer you may claim the excess as a credit on your return, but if a single employer withheld too much, you cannot — the employer must adjust it, or you file Form 843.

Withholding is a guess; your tax is a fact

The federal income tax line is not a percentage of anything on the stub. Payroll takes the gross for the period, annualizes it, applies the filing status and adjustments from your Form W-4 using the methods in Publication 15-T, computes a full-year tax, and divides by the number of pay periods. It is a forecast that assumes this paycheck is representative of your whole year.

That assumption breaks constantly, which explains most refunds and most surprise bills. A bonus, a mid-year raise, a second job, a working spouse, a quarter of overtime — each one makes a single period unrepresentative. The 2026 W-4 is built around exactly these cases: Step 2 for multiple jobs or a working spouse, Step 3 for dependent credits ($2,200 per qualifying child under 17, $500 per other dependent), Step 4(a) for income with no withholding, Step 4(b) for deductions beyond the standard $16,100 single / $32,200 joint, and Step 4(c) for a flat extra dollar amount per period.

Step 2 is the one that matters most and gets skipped most. Two jobs each withhold as though their salary were your only income, so each one applies the standard deduction and starts you at the bottom bracket — and the combined result is systematically too little. Checking the Step 2(c) box on both W-4s, or running the IRS estimator, is the fix.

What is new on the 2026 stub: tips and overtime

P.L. 119-21 created two deductions that will show up in a lot of 2026 conversations, and almost every summary of them is wrong in the same way. For tax years beginning after 2024 and ending before 2029, individuals may deduct up to $25,000 of qualified tips and up to $12,500 of qualified overtime compensation ($25,000 if married filing jointly) on their income tax returns.

Four corrections to the usual telling:

• It is not “tax-free overtime.” Only the premium qualifies — the W-4 worksheet defines it as “the ‘and-a-half’ portion of time-and-a-half compensation” required under section 7 of the FLSA. On $30/hour, the qualifying amount is the $15 premium, not the $45.
• FICA is untouched. Publication 15 states plainly that overtime compensation remains “subject to social security, Medicare, and FUTA taxes.” This is an income-tax deduction on the return, not a payroll exemption.
• Nothing happens to your paycheck automatically. The IRS tells employers to use “an employee’s updated Form W-4, if one is submitted” so the employee can “receive more money in each paycheck instead of waiting until filing.” No new W-4, no change to your stub — you collect it as a larger refund instead.
• There is an income ceiling. The W-4 worksheet gates both lines at total income below $150,000 ($300,000 married filing jointly).

Mandatory service charges added to a bill are explicitly not qualified tips, and the tips deduction is limited to occupations that customarily received tips on or before December 31, 2024.

A five-minute check on your next stub

1. Divide YTD Social Security by 0.062 and YTD Medicare by 0.0145. Both should return your YTD wage figures (Social Security capped at $184,500).
2. Compare YTD federal taxable wages with YTD Social Security wages. The gap should equal your YTD 401(k) deferrals — no more, no less.
3. Confirm the filing status printed on the stub is the one on your current W-4.
4. If you started a job this year, check whether Social Security restarted from zero. If so, note it now; the credit is claimed on your return.
5. Multiply the current period’s federal withholding by your number of pay periods. If that annualized figure is far from what you expect to owe, the W-4 — not the stub — is what needs changing.

Then run the same salary through the take-home pay calculator and compare. Where the two disagree, the difference is almost always a deduction the calculator does not know about — and finding out which one is the entire point of the exercise.

One modelling note, stated plainly: the “Pre-tax 401(k)/deductions” field on this site’s calculators is modelled as a retirement deferral — it reduces federal (and, except in Pennsylvania, state) taxable income while leaving Social Security and Medicare untouched, which is the Publication 15 treatment described above. If you enter a Section 125 health premium there instead, the calculator will overstate your FICA, because that premium would also be excluded from Social Security and Medicare wages.