How to Read a Pay Stub: Every Line Explained (2026)
March 2026 · 7 min read
Quick Answer
Gross pay is your total earnings before deductions. Net pay is what you take home. The difference is taxes (federal, state, FICA) and benefits deductions (health insurance, 401k). Most employees take home 65–75% of gross pay.
Every Line on a Pay Stub Explained
Here is what every common line item on a US pay stub means.
| Line Item | What It Means |
|---|---|
| Gross Pay | Total earnings before any deductions |
| Federal Income Tax | Withheld based on W-4 and tax bracket |
| State Income Tax | Varies by state — none in TX, FL, WA, NV, WY, SD, AK, NH, TN |
| Social Security (FICA) | 6.2% of wages up to $176,100 (2026) |
| Medicare (FICA) | 1.45% of all wages (2.35% above $200,000) |
| 401k Contribution | Pre-tax retirement savings — reduces taxable income |
| Health Insurance | Usually pre-tax premium for employer plan |
| Dental/Vision | Pre-tax premiums for supplemental coverage |
| HSA Contribution | Pre-tax health savings account contributions |
| Net Pay | Your take-home pay after all deductions |
| YTD Gross | Total earnings since January 1 this year |
How Much of Your Gross Pay Do You Keep?
The percentage of gross pay you take home varies based on income level, state and benefits choices.
| Annual Salary | Approx. Take-Home % | Monthly Net Estimate |
|---|---|---|
| $40,000 | 78–82% | $2,600–$2,750 |
| $60,000 | 74–78% | $3,700–$3,900 |
| $80,000 | 70–74% | $4,650–$4,950 |
| $100,000 | 68–72% | $5,650–$6,000 |
| $150,000 | 62–67% | $7,750–$8,375 |
How to Use Your Pay Stub for Budgeting
Your net pay is the number that matters for budgeting — not your salary. Use your actual take-home pay as the starting point for your 50/30/20 budget. Many people budget from their salary and wonder why they always come up short. Use your net pay from the most recent pay stub.
Build a Budget Based on Your Net Pay
Use our free budget calculator with your actual take-home pay for an accurate budget.
Try the Budget Calculator →Frequently Asked Questions
What is the difference between gross pay and net pay?
Gross pay is your total earnings before any deductions. Net pay is what you actually receive after federal and state income tax, FICA taxes and any benefit deductions are subtracted.
What is FICA on a pay stub?
FICA stands for Federal Insurance Contributions Act. It covers Social Security (6.2% of wages up to $176,100 in 2026) and Medicare (1.45% of all wages). Your employer matches these contributions.
What is YTD on a pay stub?
YTD stands for Year-To-Date. It shows the cumulative total of your earnings and deductions from January 1 to your current pay date. Useful for tracking annual income and tax withholding.
How do I know if enough tax is being withheld?
Use the IRS Tax Withholding Estimator at irs.gov. If you owed taxes last April or got a large refund your W-4 may need updating. A large refund means you gave the government an interest-free loan all year.
What is a pre-tax deduction vs post-tax deduction?
Pre-tax deductions like 401k contributions and health insurance premiums reduce your taxable income. Post-tax deductions like Roth 401k contributions and some life insurance are taken after taxes are calculated.