Most people glance at the net-pay number on their stub and never read the rest, yet the stub is the single best record of how your compensation actually works. Every line documents money you earned, money withheld for taxes, and money routed to benefits. Learning to read it top to bottom helps you verify you are paid correctly and spot problems before they compound.
Earnings and hours
The earnings section lists each type of pay separately: regular hours, overtime, holiday pay, bonuses, and commissions. For hourly workers it shows the rate, the number of hours, and the resulting amount for each category. Salaried stubs usually show the flat amount for the period. Add these up and you get gross pay for the period, which should match your expected salary or wage.
Taxes withheld
The tax section separates the mandatory withholdings, and each is labeled distinctly. Federal income tax reflects your W-4 choices, while Social Security appears as FICA or OASDI at 6.2 percent and Medicare at 1.45 percent of eligible wages. State income tax and sometimes local or city taxes appear if your state imposes them. These are estimates of your annual tax that get reconciled when you file a return, not final tax bills.
Deductions and contributions
This area shows money diverted to benefits, split between pre-tax and post-tax items. You will see retirement contributions such as a 401(k), insurance premiums for health, dental, and vision, and any HSA or FSA elections. Many stubs also list employer contributions, like a 401(k) match or the portion of your health premium your company pays, which is information only and not subtracted from your pay. Reviewing these confirms your benefit elections took effect at the amounts you chose.
Net pay and year-to-date columns
Net pay is the bottom-line figure deposited to your account after all taxes and deductions. Nearly every line also has a year-to-date column that accumulates from January 1, which is where you track progress toward the Social Security wage cap or an annual 401(k) limit. The YTD totals are what you use to sanity-check your eventual W-2 and to estimate your full-year tax picture. If a YTD number looks off, it is far easier to fix in March than the following January.
Devin's stub shows $2,000 regular earnings, then withholdings of $124 for Social Security, $29 for Medicare, $180 for federal tax, and $70 for state tax, plus a $100 pre-tax 401(k) deduction. His net pay is about $1,497. The YTD column shows he has already contributed $1,300 to his 401(k), keeping him on pace for his savings goal.
Key takeaways
- Earnings lines should sum to your expected gross pay for the period.
- FICA or OASDI is Social Security at 6.2 percent; Medicare is a separate 1.45 percent line.
- Employer contributions shown on the stub are informational and are not deducted from your pay.
- Year-to-date columns let you track annual limits and pre-check your W-2.
Common mistakes
- Ignoring the stub entirely and never verifying that pay rate, hours, or benefit deductions are correct.
- Confusing the informational employer-contribution lines with money taken out of your own pay.
- Waiting until the W-2 arrives to notice a withholding or benefit error that ran all year.
FAQ
What is the difference between OASDI and Medicare on my stub?
OASDI is the Social Security tax at 6.2 percent up to an annual wage cap, and Medicare is a separate 1.45 percent tax on all wages with no cap.
Why does my stub list money my employer paid?
Employers often show their share of premiums and any retirement match so you can see your full compensation, but those amounts are not subtracted from your gross pay.