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Paystub basics

How to read a US paystub

Definition

A US paystub is read top to bottom in four sections: (1) the header identifies employer, employee, pay period, and pay date; (2) earnings show hours × rate for regular, overtime, and other pay; (3) deductions list pre-tax benefits, taxes, and post-tax items; (4) totals show current and year-to-date gross, taxes, and net pay.

Section 1: The header

The top of every US paystub identifies:

• Employer name, address, and Federal Employer Identification Number (EIN, format 12-3456789)

• Employee name, address, and either full SSN, last 4 of SSN, or an internal employee ID (Walmart uses WIN, Target uses team-member ID, etc.)

• Pay period start and end dates (the days worked)

• Pay date (the day the money is deposited or the check is dated)

• Check number or direct deposit reference

Section 2: Earnings

The earnings block itemizes every kind of pay that made up your gross. For hourly workers you will see rows like:

• Regular — hours × rate = amount (e.g., 80 hrs × $18.50 = $1,480)

• Overtime — hours × 1.5 × rate = amount (federal rule: over 40 hrs/week)

• Holiday, Sick, Vacation, PTO — used PTO paid at your regular rate

• Bonus, Commission, Tips — separate lines with their own rates or flat amounts

Each row typically has a "Current" column and a "YTD" column. The Current column total = current-period gross.

Section 3: Deductions

Deductions are usually grouped by tax treatment:

Pre-tax deductions — reduce your taxable income before federal tax is calculated. Common items: 401(k) traditional, HSA, section 125 medical/dental/vision premiums, transit and parking benefits, FSA.

Taxes — federal income tax, Social Security (OASDI, 6.2%), Medicare (1.45%), state income tax, and any local tax. This is the biggest chunk for most workers.

Post-tax deductions — taken after tax. Common items: Roth 401(k), life insurance premiums, disability insurance premiums, union dues, garnishments, charitable contributions.

Section 4: Totals

The bottom of the stub shows:

• Current Gross — total earnings this pay period, before any deduction

• Total Deductions — the sum of all deductions

• Current Net Pay — the amount deposited or paid

• YTD Gross, YTD Taxes, YTD Deductions, YTD Net — running totals for the calendar year

• Sometimes: PTO/sick balances, direct-deposit routing, employer contributions (401(k) match, HSA seed) — informational only, not deducted

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Frequently asked

What is the "employer contribution" line?

Money your employer paid on your behalf that does not come out of your check — for example, the 6.2% FICA employer match, 401(k) match, or HSA seed contribution. It is informational.

Why is my net pay less than gross minus taxes?

Because there are other deductions besides taxes — health insurance premiums, 401(k), HSA, life insurance, garnishments, union dues, etc. Add every deduction line, subtract from gross, and you should land on net.

What if a deduction I did not authorize is on my paystub?

Contact payroll immediately and get the authorization in writing. Under the Fair Labor Standards Act, most unauthorized deductions from a US paycheck are illegal, though some (garnishments, tax levies) require no consent.

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