How to read a paystub — every line explained

Paystubs feel needlessly confusing. Different employers use different labels for the same number — "Federal Taxable" here, "Fed Tax Wages" there, "Box 1 Wages" somewhere else. Lines stack up in non-obvious order. The math behind some of them is non-intuitive (gross is bigger than taxable wages, FICA wages is bigger than taxable wages, you might owe federal tax on income that isn't even on your paystub yet). This guide goes line by line through the typical paystub, what each number means, and which ones matter for what you owe at tax time.

Gross pay

The top line. Total compensation for the pay period before any deduction. For an hourly worker, this is rate × hours worked plus overtime; for a salaried worker, it's annual salary divided by your number of pay periods (52 weekly, 26 biweekly, 24 semi-monthly, 12 monthly). Bonuses, commissions, and equity vesting show up here when they hit a paycheck — often as a separate line within the gross-pay block.

Pre-tax deductions

Money taken out of gross pay before federal income tax is computed. The most common pre-tax lines:

• Traditional 401(k) / 403(b). Reduces federal taxable wages but not FICA wages. See how 401(k) affects your withholding for the math.
• HSA contributions through payroll. Both your contribution and (sometimes) your employer's. Reduces federal taxable wages and FICA wages.
• FSA / Dependent Care FSA. Health-care or dependent-care set-aside accounts. Section 125 cafeteria plan deductions — reduce federal taxable wages and FICA wages.
• Pre-tax health insurance premiums. Most employer-sponsored medical, dental, and vision premiums are pre-tax under a Section 125 plan. Reduces federal and FICA wages.

These deductions show up above the federal-tax line on your paystub, and the cumulative effect is to make your federal taxable wages smaller than your gross pay.

Federal taxable wages (the number Breakeven needs)

Sometimes labeled "Fed Taxable Wages", "Federal Taxable Income", or "Box 1 Wages". Equals gross pay minus the pre-tax deductions in the section above. This is the wage amount the IRS uses to compute federal income tax withholding per Pub 15-T Worksheet 1A — and it's the amount you should enter into Breakeven's "Federal taxable" field, not the gross-pay number.

Federal income tax withheld

The federal income tax dollars sent to the IRS on your behalf for this pay period. Computed by your employer's payroll system using the federal-taxable-wages number plus whatever's on file from your W-4 (filing status, Step 3 dependents credit, Step 4 entries, etc.). At year end, the sum of every paycheck's federal-tax-withheld line lands in Box 2 of your W-2 and reconciles against your total tax liability on your 1040.

FICA: Social Security + Medicare

Two separate lines on most paystubs:

• Social Security (OASDI): 6.2% of FICA wages, capped at the annual wage base ($176,100 in 2025; 2026 figure announced annually).
• Medicare: 1.45% of FICA wages, no cap. Plus an additional 0.9% Medicare surtax on FICA wages above $200,000 single / $250,000 MFJ — though employers don't withhold this surtax until your year-to-date wages with that single employer cross $200k. See the FICA caveat in the calculator's footer for why this can cause under-withholding for multi-job households.

FICA wages typically equals gross pay minus Section 125 cafeteria-plan deductions — that is, your 401(k) contribution does NOT reduce FICA wages even though it reduces federal taxable wages. This is why the FICA number on your paystub is usually larger than the federal taxable wages number.

State and local income tax withholding

If you live in a state with an income tax (most do — see the 2026 federal and state brackets page), there's a separate state-tax-withheld line. The amount is determined by the state's own withholding rules and your state W-4 equivalent (CA DE-4, NY IT-2104, etc.). Breakeven's state row models this for the states it supports — when you select your state in the calculator, the state-withheld field appears alongside federal-withheld on each paycheck input.

Post-tax deductions

Anything taken out of net pay after federal income tax is computed:

• Roth 401(k). After-tax contribution to a retirement account. Doesn't reduce federal taxable wages. See the 401(k) guide for traditional vs. Roth treatment.
• Garnishments. Court-ordered deductions (child support, judgment liens, IRS levies). These come out after taxes are computed.
• Charitable contributions through workplace giving programs.
• After-tax life or disability insurance premiums.

Year-to-date totals

Most paystubs show two columns: this period and year to date. The YTD column is what matters for tax planning. Breakeven's projection extrapolates year-end liability and withholding from your YTD numbers, so a stale or wrong YTD line skews the entire projection. If you take time off without pay, change your contribution rate, or switch jobs mid-year, the YTD total reflects all of that and the calculator handles it correctly.

Net pay

Gross pay minus all deductions (pre-tax, taxes, post-tax) — what actually hits your bank account. The bottom line, not in the paystub-design sense but in the literal sense.

Cross-checking with Breakeven

Open the Breakeven calculatorand enter the federal taxable wages and federal income tax withheld from your paystub for each pay period this year. The calculator will project your annual totals and flag any gap between what your withholding will sum to vs. what you'll owe in federal tax. If the per-paycheck withholding Breakeven expects given your W-4 doesn't match what your employer is actually withholding (the "Proj. withheld" vs actual stat in the projection card), the W-4 on file with HR probably doesn't match what you think it is.

For the W-4 step-by-step, see how to fill out the 2026 W-4; for the underlying math, see the methodology.