How to Read Your Paycheck: Every Line Item Explained (2026)

You work hard for your paycheck, but do you know where every dollar goes? Most Americans look at the "Net Pay" line and ignore everything above it. That's a costly mistake — understanding your pay stub can help you spot errors, optimize your withholding, and put more money back in your pocket. This guide walks through every section of a standard 2026 pay stub line by line.

Gross Pay vs. Net Pay: The Big Picture

The two most important numbers on any pay stub are Gross Pay and Net Pay. Gross pay is what you earned before any deductions. Net pay — often called take-home pay — is what actually hits your bank account after taxes and other withholdings are removed.

For a $75,000-a-year employee paid bi-weekly, gross pay per check is $2,884.62. After all federal, state, and FICA deductions, a typical net pay might be around $2,100–$2,200 — a difference of over $700 per paycheck.

Federal Income Tax Withholding

This is the largest deduction for most workers. Your employer uses the information on your W-4 form — your filing status, number of dependents, and any extra withholding you requested — to calculate how much to withhold each pay period.

In 2026, federal income tax uses progressive brackets ranging from 10% to 37%. The key point: you are not taxed at your top bracket rate on all your income. Only the income that falls within each bracket is taxed at that rate. The calculator on this site uses the exact 2026 IRS brackets (Rev. Proc. 2025-32) to give you an accurate estimate.

• 10% on income up to $11,925 (single) / $23,850 (MFJ)
• 12% on income $11,926–$48,475 (single)
• 22% on income $48,476–$103,350 (single)
• 24% on income $103,351–$197,300 (single)
• 32% on income $197,301–$250,525 (single)
• 35% on income $250,526–$626,350 (single)
• 37% on income above $626,350 (single)

Social Security & Medicare (FICA)

FICA stands for the Federal Insurance Contributions Act. These two taxes fund your future Social Security retirement benefits and Medicare health coverage. They are calculated as a flat percentage of your wages — not progressively like income tax.

• Social Security: 6.2% of wages up to the 2026 wage base of $176,100. Once you earn more than this, Social Security tax stops for the rest of the year.
• Medicare: 1.45% of all wages with no cap. High earners (over $200,000 single / $250,000 MFJ) pay an additional 0.9% Additional Medicare Tax.

Your employer pays a matching amount — an equal 6.2% for Social Security and 1.45% for Medicare — on top of your wages. That employer share does not appear on your pay stub but represents a real cost of employing you.

State Income Tax

Depending on where you live, a state income tax line may also appear on your pay stub. Nine states have no state income tax at all: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. The remaining states have rates ranging from a flat 3% (e.g., Indiana) to over 13% (California's top bracket).

Some states use flat rates, others use progressive brackets similar to the federal system. Your employer typically calculates state withholding using state-issued withholding tables based on a state equivalent of the W-4.

Pre-Tax Deductions

Pre-tax deductions are contributions that are subtracted from your gross pay before taxes are calculated. This reduces your taxable income, which lowers all income-based taxes. Common pre-tax deductions include:

• 401(k) contributions: Up to $23,500 in 2026 ($31,000 if age 50+).
• Health insurance premiums: Your share of employer-sponsored health, dental, and vision coverage.
• Health Savings Account (HSA): Up to $4,300 for self-only or $8,550 for family coverage in 2026.
• Flexible Spending Account (FSA): Up to $3,300 for healthcare FSA in 2026.
• Dependent Care FSA: Up to $5,000 for qualified childcare expenses.

Post-Tax Deductions

Post-tax deductions come out after taxes are calculated. They do not reduce your taxable income. Common examples include Roth 401(k) contributions (after-tax for tax-free growth), union dues, life insurance (above the employer-sponsored limit), and wage garnishments. While these reduce your net pay, they don't provide the immediate tax savings that pre-tax deductions do.

Year-to-Date (YTD) Figures

Most pay stubs also show Year-to-Date (YTD) columns alongside each current-period figure. These running totals show how much you've earned and how much has been withheld from January 1st through your current pay date. YTD figures are essential for:

• Tracking when you'll hit the Social Security wage base and stop paying that 6.2%.
• Verifying your W-2 at tax time will match your records.
• Spotting if your employer has made a withholding error mid-year.