💼 Jobs & Career
Pay Stub Explained: Understanding Your Paycheck
Your pay stub has a lot of numbers. Here's what each line means and how to make sure you're being paid correctly.
Pay Stub Breakdown
| Line Item | What It Means | Typical % |
|---|---|---|
| Gross Pay | Total earned before deductions | 100% |
| Federal Income Tax | IRS taxes (based on W-4) | 12-22% |
| State Income Tax | State taxes (0% in some states) | 0-10% |
| Social Security (FICA) | 6.2% of gross pay | 6.2% |
| Medicare | 1.45% of gross pay | 1.45% |
| Health Insurance | Your premium share | Varies |
| 401(k) | Retirement contributions | 0-15% |
| Net Pay | What you actually take home | 65-75% |
Example: $60K Salary
- Gross pay per paycheck: $2,307 (bi-weekly)
- Federal tax: -$370
- State tax: -$115 (avg 5%)
- Social Security: -$143
- Medicare: -$33
- Health insurance: -$150
- 401(k) (6%): -$138
- Net pay: ~$1,358 per paycheck
Common mistakes: If your gross pay doesn't match your offer letter, speak up immediately. If deductions seem wrong, check your W-4 elections. If your net pay keeps changing, your benefits or tax elections may have shifted. Always keep your pay stubs for at least3 years.
⚠️ Pay Stub Tips:
- Don't ignore errors " — report them immediately
- Don't throw away pay stubs " — keep them for3+ years
- Don't forget to update your W-4 after life changes (marriage, kids)
- Don't assume your employer is right " — verify the math yourself
The bottom line: Your net pay is typically 65-75% of gross pay. Major deductions: federal tax (12-22%), state tax (0-10%), FICA (7.65%), health insurance, and 401(k). Check every pay stub for errors. Keep stubs for3+ years for tax purposes.