What Important Information Is Available on a Pay Stub?

A pay stub serves as a detailed record of an employee’s earnings and deductions for a specific pay period. It provides transparency into how gross earnings are calculated and what amounts are withheld for taxes, benefits, and other contributions. Understanding this information is important for managing personal finances, verifying accurate payments, and ensuring compliance with tax obligations. This document acts as a comprehensive financial snapshot for each payment cycle.

Employee and Employer Identification

A pay stub clearly identifies both the employee and the employer. The employee’s section includes their full name, address, and often a unique employee identification number. This information helps ensure accurate record-keeping and verifies personal details for payroll and tax purposes.

The employer’s information is also prominently displayed, featuring the company’s name, address, and its Employer Identification Number (EIN). An EIN is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to identify a business entity for tax reporting, similar to a Social Security Number. Pay stubs also specify the pay period start and end dates, along with the actual pay date, defining the work duration covered by the payment.

Gross Pay Details

Gross pay represents the total amount of money an employee earns before any deductions are taken out. This figure is composed of various types of compensation, depending on the employee’s role and how they are paid.

For hourly employees, gross pay includes the hourly rate multiplied by the number of regular hours worked. If an employee works more than their standard hours, overtime pay is often shown separately, calculated at a higher rate, such as 1.5 times the regular hourly rate. Other forms of variable income, such as commissions, bonuses, or tips, are also included. Pay stubs may also list other earnings, like shift differentials or taxable non-cash benefits.

Key Deductions

Deductions are amounts subtracted from an employee’s gross pay, leading to their net pay. These deductions fall into several categories, with tax deductions being the most significant. Federal income tax is withheld based on the information provided by the employee on their Form W-4, which considers factors like filing status and dependents. State and local income taxes are also withheld where applicable, with rates varying by jurisdiction.

FICA taxes, which fund Social Security and Medicare, are mandatory federal payroll taxes. The Social Security tax rate is 6.2% for employees, applied to earnings up to a wage base limit. The Medicare tax rate is 1.45% for employees, applied to all covered earnings with no wage limit. An additional Medicare tax of 0.9% applies to wages exceeding specific income thresholds.

Beyond taxes, pay stubs show pre-tax deductions, which reduce an employee’s taxable income before tax calculations. Common examples include health insurance premiums, contributions to retirement accounts like a 401(k) or 403(b), and contributions to Flexible Spending Accounts (FSAs) or Health Savings Accounts (HSAs) for healthcare or dependent care expenses. For instance, the pre-tax limit for elective deferrals to 401(k), 403(b), and 457(b) plans increased to $23,500 in 2025. The annual limit on pre-tax contributions to health FSAs through a cafeteria plan is $3,300 in 2025.

Post-tax deductions are taken after taxes have been calculated and withheld. These do not reduce taxable income. Examples include repayments for 401(k) loans or company loans, wage garnishments ordered by a court, or union dues.

Net Pay and Cumulative Information

Net pay, often referred to as take-home pay, is the amount an employee receives after all deductions have been subtracted from their gross pay. This figure represents the actual funds deposited into an employee’s bank account or provided as a physical check. It is the final amount available for personal spending and savings.

Pay stubs also provide year-to-date (YTD) information, offering a running total of earnings and deductions from the beginning of the calendar year to the current pay period. This includes YTD gross pay, the cumulative total of all earnings before deductions. YTD deductions show the sum of all withheld amounts for each category, such as federal income tax, Social Security, Medicare, and benefit contributions. These cumulative figures are important for tracking overall financial progress and for tax planning throughout the year, directly correlating with the information reported on an employee’s annual W-2 form.