What Does a Pay Stub Typically Include?

A pay stub serves as a detailed record of an employee’s earnings and deductions for a specific pay period. Also known as a pay statement or wage statement, it provides transparency on how gross earnings are calculated and what amounts are withheld. Understanding this information is important for managing personal finances, verifying income, and tracking contributions to benefits and taxes.

Employee and Employer Information

At the top of a pay stub, key identifying details for both the employee and the employer are listed. This section includes the employee’s full name, address, and employee identification number. For the employer, the company name, address, and Employer Identification Number (EIN) are provided.

This initial part of the pay stub also specifies the relevant dates for the compensation. It shows the start and end dates of the pay period, which indicates the timeframe during which the wages were earned. The pay date, when the payment was issued to the employee, is also clearly indicated.

Earnings Breakdown

The earnings breakdown section details how an employee’s total gross pay is calculated before any deductions are applied. Gross pay represents the total amount earned, encompassing all forms of compensation for the pay period.

For hourly employees, this section shows their hourly rate and the total number of regular hours worked during the pay period. Salaried employees see their fixed salary amount for that specific pay period. The pay stub also itemizes overtime hours worked and the corresponding overtime pay rate, which contributes to the overall gross earnings. Other forms of income, such as bonuses, commissions, or tips, are also included in this breakdown.

Deductions and Withholdings

This section details the various amounts subtracted from an employee’s gross pay, leading to their net or take-home pay. These subtractions fall into mandatory and voluntary categories. Understanding these deductions is important for comprehending the difference between gross and net earnings.

Mandatory deductions primarily consist of taxes. Federal income tax is withheld based on the information provided by the employee on their Form W-4. State and local income taxes are also withheld where applicable, though these vary significantly by location. Federal Insurance Contributions Act (FICA) taxes are another mandatory withholding, funding Social Security and Medicare programs. Employees contribute 6.2% of their wages to Social Security, up to an annual wage base limit of $176,100, and 1.45% to Medicare, with no wage limit. An additional 0.9% Medicare tax is withheld from wages exceeding $200,000 for single filers.

Voluntary deductions are those an employee chooses to have withheld. Pre-tax deductions are subtracted from gross pay before income taxes are calculated, which reduces the employee’s taxable income. Common examples include contributions to health insurance premiums, 401(k) retirement plans, and Flexible Spending Accounts (FSAs) or Health Savings Accounts (HSAs). Post-tax deductions, conversely, are taken out after taxes have been calculated and do not reduce taxable income. Examples of post-tax deductions include Roth 401(k) contributions, certain life insurance premiums, union dues, or court-ordered wage garnishments for debts like child support or defaulted loans.

Net Pay and Year-to-Date Totals

After all mandatory and voluntary deductions are subtracted from gross pay, the remaining amount is the net pay. This figure, often referred to as “take-home pay,” is the actual amount an employee receives via direct deposit or check for the pay period.

Pay stubs also provide year-to-date (YTD) totals, which show the cumulative amounts for all earnings and deductions from the beginning of the calendar year up to the current pay period. YTD figures offer a running tally of gross earnings, taxes withheld, and all deductions. Some pay stubs may additionally display current balances for paid time off (PTO), sick leave, or vacation time.