How to read a pay stub

So you have your pay stub on hand (or on your screen), but how do you read it? There are five main sections in a typical pay stub:

  1. personal information
  2. payment period
  3. Total earnings
  4. Taxes and discounts
  5. net income

Let’s take a look at each of these pay stub components for a better understanding:

1. Personal information

The top of your pay stub will include your legal name, Social Security number, home address, and usually your enrollment status and exemptions.

The pay stub may also include work details, such as how much paid time off you’ve collected and taken, your employee ID, and how you’re paid (hourly vs. paycheck).

The company name and address are usually printed at the top.

Ring tip: Check that your filing status is correct for tax season, as your employer uses this status to predict your tax deduction (how much money should be withheld from your paycheck for taxes). If they withhold too little because your enrollment status is wrong, you could end up owing money in April.

2. Payment period

Before the actual payment information, payslips also list the pay period (the date range for which the employer issues the payment) and the date the payment was issued.

3. Total earnings

Here’s where pay slips get exciting: This part shows how much money you earned during the pay period.

If you’re getting paid, the number will look flat from pay stub to pay stub — until you get a raise, take unpaid leave, or earn a bonus. If you are an hourly worker, your pay stub will indicate the number of hours you worked during the pay period, your hourly rate, and the earnings generated.

Additional earnings, such as expense reimbursement or overtime pay (and rate) will also appear in this section.

This section usually displays the total earnings for the current pay period and the year to date.

4. Taxes and discounts

Don’t get too stuck with that catchy number in the gross earnings department. It’s not what you’d actually take home. The next section of your pay stub is for money you owe.

First, you have to pay Uncle Sam his fair share of federal taxes, and your state—and maybe even your city and/or school district—may take a cut, too. You’ll also see Social Security and Medicare deductions here.

If you receive health insurance through your employer, you will likely pay the premium out of your paycheck, so that shows up in deductions as well. Other common deductions include 401(k) contributions, FSA contributions, and global health account contributions.

As with gross salary, your pay stub will usually show deductions for the current pay period to date.

5. Net income

Finally, your net income is how much money you actually pay. It’s your gross income minus taxes and deductions. This amount must match what goes into your bank account.

You can usually see net income for the current pay period to date.

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