How to Read Your Pay Stub: Every Deduction Explained (2026)

Your pay stub is a financial blueprint that most people never actually read. Let’s dissect every line item using a real-world example: a single filer earning $75,000 per year, paid biweekly (26 pay periods). Gross pay per paycheck: $2,884.62. What happens between that number and the amount that hits your bank account is the entire story of taxation.

Federal income tax withholding is the biggest bite. Based on your W-4 elections — single, no extra withholdings, standard deduction — your employer withholds approximately $345 per paycheck ($8,970/year). This is an estimate of your actual liability; at $75,000 your true federal tax bill is roughly $7,960, meaning you’ll get about $1,000 back at filing time. Your withholding is intentionally set slightly high to avoid underpayment penalties.

FICA taxes come next and are non-negotiable. Social Security takes 6.2% of every dollar up to $184,500 — on your $2,884.62 check, that’s $178.85. Medicare takes 1.45% with no cap — another $41.83. Combined FICA per paycheck: $220.68 ($5,737/year). Your employer matches this dollar-for-dollar, so the total FICA contribution on your behalf is $11,474. You never see the employer half, but it’s part of your total compensation cost.

State income tax varies enormously. In New York, $75,000 hits the 5.97% bracket with an effective rate around 4.7% — roughly $135 per paycheck ($3,525/year). In Texas or Florida, this line simply doesn’t exist, adding $135 back to every check. In California, you’d see roughly $115 per check ($2,990/year). Some states also show local taxes — New York City residents see an additional $95/check for city tax.

Pre-tax deductions reduce your taxable income before any of the above is calculated. A 6% 401(k) contribution on $75,000 removes $173.08 per paycheck ($4,500/year) from your taxable income, saving you roughly $50/check in federal tax. Health insurance premiums — averaging $115/paycheck for single coverage through an employer plan — are also typically pre-tax. These deductions lower every tax calculation above, which is why maximizing pre-tax contributions is the most accessible tax reduction strategy.

The final tally for our $75,000 earner in New York: gross $2,884.62, minus federal withholding ($345), minus Social Security ($178.85), minus Medicare ($41.83), minus state tax ($135), minus 401(k) ($173.08), minus health insurance ($115). Net deposit: approximately $1,895.86. That’s 65.7% of gross pay reaching your bank account. Understanding each line item is the first step toward optimizing how much you keep.

A note on the figures above: the withholding amounts are what a payroll system produces from a single filer's default W-4. The annual tax the calculator computes for $75,000 in 2026 is $7,725 federal, $5,738 FICA, $3,453 New York state tax and $3,017 California, so over-withholding of a few hundred dollars across the year is normal and comes back as a refund.

The four blocks every stub shares. Earnings: regular hours or salary, overtime at 1.5×, bonus, commission, PTO and holiday pay, each with a current-period and year-to-date column. Pre-tax deductions: 401(k) or 403(b), medical, dental and vision premiums, HSA and FSA contributions, commuter benefits, and sometimes a pension contribution. Taxes: federal income tax withholding, Social Security, Medicare, state income tax, and any city, county or school-district tax. After-tax deductions: Roth 401(k), supplemental life or disability insurance, union dues, garnishments, charitable giving through payroll. Net pay is the earnings total minus everything in the other three blocks, and it should match the deposit to the dollar.

Why 401(k) and health premiums sit on different lines. Both are 'pre-tax', but they are pre-tax for different taxes. A traditional 401(k) contribution is excluded from federal and state income tax wages but not from Social Security and Medicare wages — you still pay the 7.65% on it, and the stub's 'FICA taxable wages' figure will be higher than its 'federal taxable wages' figure by exactly your 401(k) amount. Health, dental and vision premiums and HSA contributions taken through a Section 125 cafeteria plan are excluded from both, which is why $100 of premium saves a 22%-bracket worker about $29.65 rather than $22. Roth 401(k) contributions are excluded from nothing; they are taxed now and come out tax-free later.

The year-to-date column is the one to read. It is where the limits show up: Social Security withholding stops once YTD wages pass $184,500, so a high earner's net pay jumps in the fall; 401(k) deferrals stop at $24,500 for 2026 ($32,500 with the age-50 catch-up), so a worker who front-loads sees a mid-year jump too. YTD federal withholding divided by YTD taxable wages is your running withholding rate — compare it with the effective rate the take-home calculator shows for your salary and filing status, and if it is more than two points off, the W-4 needs attention before April.

Codes that confuse people. 'FIT' or 'FWT' is federal income tax withholding; 'SIT' is state; 'OASDI' or 'FICA-SS' is Social Security; 'HI' or 'FICA-Med' is Medicare; 'SDI' is state disability insurance (California, New Jersey, New York, Rhode Island, Hawaii and a few others, up to about 1.2% of wages); 'PFL' or 'FLI' is paid family leave insurance; 'LST' in Pennsylvania is the local services tax, up to $52 a year; 'OPT' in Colorado is the occupational privilege tax, a flat few dollars a month. 'Imputed income' is the taxable value of a benefit the employer provides — group life insurance above $50,000, a gym membership — added to wages for tax and then subtracted again, so it raises taxes without raising pay.

When net pay changes and nothing else did. The common causes, in order: a new year reset the Social Security and 401(k) counters; open enrollment changed premiums; a pay period included overtime or a bonus, which payroll withholds as though you earned that much every period (bonuses at a flat 22%); you hit the Social Security wage base or the 401(k) limit; a new W-4 took effect; a garnishment or benefits catch-up started; or a move changed state or local withholding. The net pay calculator reproduces the stub from the gross figure so you can see which line moved.

Run this analysis on your actual salary.