What Information Is Available on a Pay Stub?
Unravel the complexities of your pay stub. Learn to interpret your earnings, deductions, and ensure your take-home pay is accurate.
A pay stub details an employee’s earnings and deductions for a specific pay period. It provides transparency into gross wages and withheld amounts before net pay. Understanding its components is important for managing personal finances, verifying income, and accurate tax reporting.
Essential Identification Details
The top section of a pay stub contains identification details for the employee and employer. Employee information includes full name, employee ID, and address. A masked Social Security number (last few digits) is often present. It also specifies the tax filing status elected on Form W-4 (e.g., Single or Married) and claimed allowances or dependents, impacting federal income tax withholding.
Employer information includes the company’s legal name, address, and Employer Identification Number (EIN). The EIN is a nine-digit number assigned by the IRS for tax purposes. The pay stub specifies the pay period’s start and end dates. The pay date, when funds were disbursed, is listed.
Understanding Your Earnings
The earnings section details “gross pay,” the total amount earned before deductions. Gross pay can be composed of various income streams.
For hourly employees, regular wages are calculated by hourly rate and hours worked. Overtime pay, at a higher rate for hours beyond a standard workweek, is often itemized. Salaried employees see their fixed salary listed for the pay period. Other earnings contributing to gross pay include commissions, performance bonuses, and reported tips. Taxable fringe benefits may also be included.
Mandatory and Voluntary Deductions
After gross pay, deductions are categorized as mandatory or voluntary. Mandatory deductions are taxes employers must withhold. Federal income tax is calculated based on Form W-4. State income tax is also withheld in most states, though rates vary. Local income taxes may also be imposed by cities or counties.
FICA taxes are mandatory federal payroll taxes, comprising Social Security and Medicare. Social Security tax is withheld at 6.2% (up to an annual limit), and Medicare tax at 1.45%. Employers contribute an equal amount to these taxes.
Voluntary deductions are authorized by the employee. They are categorized as pre-tax or post-tax, affecting taxable income. Pre-tax deductions, like health, dental, and vision insurance premiums, reduce taxable income before taxes are calculated. Contributions to retirement plans (e.g., 401(k)s, 403(b)s), Flexible Spending Accounts (FSAs), and Health Savings Accounts (HSAs) are also common pre-tax deductions.
Post-tax deductions are withheld after taxes are calculated. Examples include premiums for life or disability insurance. Other post-tax deductions include wage garnishments (e.g., for child support or defaulted student loans). Repayments for 401(k) loans, union dues, or charitable contributions also fall into this category.
Year-to-Date Summaries and Net Pay
Pay stubs provide “Year-to-Date” (YTD) summaries, cumulative totals of earnings and deductions from the calendar year’s start to the current pay period. They display YTD gross pay, federal tax withheld, Social Security contributions, and voluntary deductions like 401(k) contributions.
These cumulative figures are useful for financial planning and tax preparation, tracking overall income and withheld amounts. YTD information helps estimate annual tax obligations and monitor retirement savings progress. The final figure is “net pay,” or take-home pay. Net pay is the amount remaining after all mandatory and voluntary deductions from gross pay.
Checking Your Pay Stub for Accuracy
Regular pay stub review ensures financial record accuracy. Confirm personal information (name, address, tax filing status) is correct. Discrepancies affect tax withholdings or document delivery. Verify hours worked or salary matches expectations for the pay period.
Cross-reference gross pay with hours and rates. Scrutinize deductions (e.g., health insurance, 401(k) contributions) against enrollment forms or benefit statements. Check tax withholdings against W-4 elections and anticipated tax liability. Confirm net pay received matches the pay stub. If errors are identified, contact human resources or payroll to correct the issue.