So you’ve got your pay stub in hand (or on your screen), but how do you read it? There are five main sections to a typical pay stub:
- Personal information
- Pay period
- Gross earnings
- Taxes and deductions
- Net income
Let’s take a look at each of these pay stub elements 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 filing status and exemptions.
The pay stub may also include work details, like the amount of paid time off you’ve accrued and taken, your employee ID, and how you’re paid (hourly vs. salary).
The company’s name and address will also usually be printed at the top.
Chime Tip: Verify that your filing status is correct for tax season, as your employer uses this status to predict your tax withholdings (how much money to withhold from your paycheck for taxes). If they withhold too little because your filing status is wrong, you could end up owing money in April.
2. Pay period
Before the actual payment information, pay stubs also typically list the pay period (the date range for which your employer is issuing payment) and the date the payment was issued.
3. Gross earnings
Here’s where pay stubs get exciting: This portion details how much money you earned during the pay period.
If you’re salaried, the number will look consistent from pay stub to pay stub – until you get a raise, take unpaid time off, or earn a bonus. If you’re an hourly worker, the pay stub will indicate the number of hours you worked during the pay period, your hourly rate, and the resulting earnings.
Additional earnings, like reimbursement for an expense or overtime pay (and the rate), will also appear in this section.
This section typically shows gross earnings for the current pay period and the year-to-date.
4. Taxes and deductions
Don’t get too attached to that attractive number in the gross earnings section. It’s not what you’ll actually take home. The next section of your pay stub is dedicated to the money you owe.
First, you’ve got to pay Uncle Sam his fair share in federal taxes, and your state – and maybe even your city and/or school district – may also take a portion. You’ll also see Social Security and Medicare deductions here.
If you receive health insurance through your employer, you likely pay the premium out of your paycheck, so that’ll show up in the deductions as well. Other common deductions include 401(k) contributions, FSA contributions, and HSA contributions.
As with gross pay, your pay stub usually shows you deductions for the current pay period and YTD.
5. Net income
Finally, your net income represents how much money you’re actually being paid. It’s your gross income minus your taxes and deductions. This amount should match what lands in your bank account.
You can usually see net income for the current pay period and YTD.
