How to Read a US Pay Stub: Deductions, Taxes, and Net Pay

Ever stared at your pay stub and wondered where all the money went? You’re not alone. Many workers glance at the net pay number and call it a day — but understanding the details can save you from headaches at tax time. Let’s break down what those numbers actually mean.

A US pay stub shows three core figures: gross pay (what you earned), deductions (what got taken out), and net pay (what hits your bank account). For a $25/hour worker paid biweekly (80 hours), gross is $2,000 — but take-home is typically around $1,560 after taxes and standard deductions. That $440 difference? Let’s see where it goes.

The Three Core Numbers

Every pay stub boils down to these three:

• Gross pay: Total earnings before any deductions. For that $25/hour worker, that’s 80 hours × $25 = $2,000.
• Deductions: Taxes and contributions taken out. We’re talking FICA, federal income tax, state tax, 401(k), health premiums — all the stuff that reduces your paycheck.
• Net pay: Take-home pay. What actually lands in your bank account after everything is deducted. For our example, that’s roughly $1,560.

Simple enough, right? But let’s dig into those deductions — that’s where things get interesting.

YTD: Year-to-Date Column

The YTD column shows cumulative totals from January 1 through your current pay period. If you’re on paycheck 10 and earning $2,000 biweekly, your YTD gross should be $20,000. This column is crucial for verifying that your employer is withholding the right amount of tax and that your 401(k) contributions are tracking correctly.

Actually, I once had a client who noticed her YTD Social Security wages were way higher than expected — turns out her employer had been overpaying her for three months. She had to pay back the overage, but catching it early saved her from a bigger mess.

Check YTD on every stub. A typo or system error can quietly underwithhold tax — leaving you with a bill in April — or overwithhold, which is basically an interest-free loan to the government.

FICA Breakdown

FICA stands for Federal Insurance Contributions Act, and it’s two separate taxes:

• Social Security: 6.2% of your gross pay, capped at the 2026 wage base of $168,600. Once you earn more than $168k in a year, Social Security tax stops. The annual cap works out to $168,600 × 6.2% = $10,453.20.
• Medicare: 1.45% of your gross pay, no cap. High earners (over $200k for single filers) also pay an Additional Medicare Tax of 0.9%.

On that $2,000 biweekly check: Social Security = $124; Medicare = $29. Total FICA per check = $153. For someone earning $52,000 a year, that’s $3,978 in FICA taxes annually.

Oh, and one thing people often miss: your employer matches Social Security (6.2%) and Medicare (1.45%). Those match amounts aren’t on your stub, but they’re a real cost to your employer.

Federal Income Tax Withholding

Federal income tax withholding is based on your W-4 form — filing status, dependents, other income, deductions. The 2026 brackets for single filers start at 10% on the first ~$11,925, then 12% up to ~$48,475, then 22% up to ~$103,525.

On a $2,000 biweekly check for a single worker with the standard deduction, federal withholding is typically $70–$100 per check, depending on how you filled out your W-4.

Adjust your W-4 if your life situation changes — marriage, kids, second job. Underwithholding is super common when you have multiple jobs because each employer withholds as if it’s your only income.

State and Local Tax

State income tax appears as a separate line. Forty-one states levy wage income tax. Texas, Florida, Nevada, Washington, South Dakota, Wyoming, Alaska, and Tennessee (on wages) have none.

Local taxes apply in some cities: New York City (up to 3.876%), Yonkers, Philadelphia (~3.75%), and several Maryland localities. These show up as separate line items on your stub.

A $25/hour worker in NYC pays roughly $35/state + $20/local per biweekly check on $2,000 gross — about $55 more in deductions than the same worker in Texas. That adds up over the year.

Pre-Tax Deductions

Pre-tax deductions reduce your taxable income before federal and state tax are calculated — which means they save you money on taxes:

• 401(k) contributions: 2026 limit is $23,500/year. Most people contribute 3–6% of their pay. A 5% contribution on $2,000 gross = $100/check.
• Health Savings Account (HSA): 2026 family limit $8,600, single $4,400.
• Health, dental, vision premiums: Employer-sponsored plan premiums are usually deducted pre-tax.
• Commuter benefits: Up to $315/month for transit or parking (2026).

A worker contributing 5% to 401(k) drops their taxable income from $2,000 to $1,900 — which lowers federal withholding by about $10/check.

Post-Tax Deductions

Post-tax deductions come out after tax is calculated:

• Roth 401(k): Contributions are taxed now, but withdrawals are tax-free in retirement. 2026 limit $23,500.
• Roth IRA: Funded separately, but some employers offer payroll deduction.
• Wage garnishments: Child support, tax levies, creditor judgments. These are non-negotiable.
• Union dues, charitable contributions, life insurance: Vary by employer.

Net Pay

Net pay is gross minus all taxes and deductions. For a $25/hour single Texas worker, biweekly $2,000 gross typically nets $1,560–$1,620, depending on 401(k) and health premiums. NYC workers net $30–$60 less per check after state and local tax.

Verify Every Stub

Mistakes happen. Compare YTD Social Security wages against the $168,600 cap. Verify 401(k) contributions track toward the $23,500 limit. Confirm YTD federal withholding matches your projected tax liability.

Build your estimate with the monthly pay estimator for take-home by state, and check weekly cash flow with the weekly pay calculator.