How to Read a Pay Stub, Line by Line
By Beacon · Updated · 3 min read
A pay stub explains how your earnings became your take-home pay. Read the pay period, gross earnings, deductions, and net pay in that order. The deposit in your bank account is the result of those calculations, and it may be split among several accounts.
Start with the period and the work recorded
The pay date is when the employer pays you. The pay period identifies the work included. Those dates are often different, so a shift you worked yesterday may belong on the next stub.
For hourly work, compare the listed hours and rate with your records. Look separately for regular earnings, overtime, paid leave, and any adjustments. For salaried work, check the scheduled pay frequency before comparing one check with an annual salary.
Sources: CFPB: Understanding your pay stub
Follow the deductions to net pay
Deductions may include income-tax withholding, payroll taxes, insurance premiums, and retirement contributions. Some reduce the wages subject to a particular tax; others do not. That is why the taxable wage figures on a stub can differ from gross earnings.
Treat a simplified example as an arithmetic check, not a tax calculation. The amounts below are invented and do not represent tax rates or a typical benefit package.
| Illustrative paycheck | Amount |
|---|---|
| Gross earnings | $1,920 |
| Total tax withholding | −$310 |
| Employee insurance cost | −$90 |
| Retirement contribution | −$96 |
| Net pay | $1,424 |
Sources: CFPB: Understanding your pay stub
Keep current and year-to-date columns separate
The current column describes this pay period. The year-to-date column adds the amounts recorded so far in the calendar year. A large year-to-date insurance figure is not a new deduction from one check.
Suppose the retirement line shows $96 current and $768 year to date. If there were no adjustments, the current deduction increased the running total from $672 to $768. Checking that change can help explain a total that initially looks surprising.
Sources: CFPB: Understanding your pay stub
Investigate a changed deposit one line at a time
Compare two consecutive stubs. Did gross earnings change, or did a deduction change? A smaller bank deposit could also reflect a new split between checking and savings rather than lower net pay.
For example, a $1,424 net paycheck could send $1,324 to checking and $100 to savings. Comparing only the checking deposit would miss the second payment. Keep both the stub and the deposit records when asking payroll about a difference.
- Match the pay period and earnings.
- Compare each deduction with the previous stub.
- Add all direct-deposit allocations.
- Ask payroll about the specific line that does not reconcile.
Calculators for this guide
Terms in this guide
Sources and further reading
Examples are illustrative and focus on U.S. personal finance. This guide is educational, not individual financial, investment, tax, or legal advice. Read our editorial approach or report a correction.
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