A pay stub is the statement that travels with a paycheck and explains how a gross wage became a net deposit. If you have ever asked what is on a pay stub and why it needs thirty lines instead of two, the short answer is that the document is doing four jobs at once: reporting what was earned, itemizing every tax withheld, itemizing every other deduction, and keeping a running year-to-date tally that has to reconcile to a Form W-2 in January.
This article is general information, not tax or legal advice.
What Is on a Pay Stub: The Five Building Blocks
Whatever payroll system produced it, a complete pay statement organizes itself into the same five blocks. Read them in order and the arithmetic should close exactly.
1. Identification and pay period
The employer's legal name and address, the worker's name and a masked identifier, the pay date, and the pay period start and end dates. The pay date and the pay period are two different facts, and conflating them is the single most common defect on a hand-built statement. A stub dated July 31 can legitimately cover work performed July 12 through July 25.
Federal law expects this level of detail in the underlying records. Employers must keep records of hours worked each day and each workweek, total wages paid each pay period, all additions to and deductions from wages, and the date of payment along with the pay period it covers (U.S. Department of Labor, Wage and Hour Division, FLSA recordkeeping requirements). Retention periods are set out in that same guidance; check it for the current number of years.
2. Earnings, which add up to gross pay
Gross pay is an output, not an input. It is assembled from separate earnings lines, each shown with its own rate, quantity, and amount:
- Regular — hours times the hourly rate, or the salary allocated to the period
- Overtime — premium hours listed separately from regular hours, never blended into one figure
- Bonus, commission, tips, shift differential, retroactive pay — each on its own line
- Paid leave — vacation, sick, or holiday hours actually used
- Taxable fringe benefits — imputed income such as employer-paid group term life above the excludable amount, which raises taxable wages without adding cash
Splitting rate from hours is what makes a statement auditable. "Gross: $2,000" tells a worker nothing. "80 hours at $25.00" can be checked against a timesheet in ten seconds.
3. Taxes withheld
This is the block people most often get wrong, because the four common withholdings work on four different bases:
- Federal income tax — not a flat percentage. It is computed from the employee's Form W-4 using one of the methods in Publication 15-T, which employers use to figure the amount of federal income tax to withhold from wages (IRS Publication 15-T). Two people with identical gross pay and different W-4s get different withholding, and neither is an error.
- Social Security — 6.2% of Social Security wages for the employee, matched by the employer, and it stops for the year once wages reach the annual contribution base, which is $184,500 for earnings in 2026 (IRS Topic No. 751, current rates and wage limits).
- Medicare — 1.45% of Medicare wages for the employee, matched by the employer, with no wage base limit at all. On top of that, employers withhold an Additional Medicare Tax of 0.9% on wages paid to an individual in excess of $200,000 in a calendar year (IRS Topic No. 751).
- State income tax — fifty different answers. Some states use a flat rate; Pennsylvania, for example, requires withholding at a flat rate of 3.07 percent of compensation (Pennsylvania Department of Revenue, employer withholding). Others use bracket tables and their own allowance certificates. A handful withhold no state income tax at all.
- Local income tax — city, county, school district, or transit taxes where they apply, each on its own line.
4. Deductions that are not taxes
Deductions are not withholdings, and the distinction is not cosmetic — it changes the tax math. Pre-tax deductions come out before certain taxes are computed; post-tax deductions come out after and change nothing but net pay.
- Pre-tax: Section 125 cafeteria-plan medical, dental, and vision premiums; health FSA and HSA contributions; traditional 401(k) or 403(b) elective deferrals
- Post-tax: Roth 401(k) contributions, union dues, most life insurance above the pre-tax limit, charitable payroll gifts, loan repayments
- Involuntary: wage garnishments, child support orders, and tax levies, which have their own statutory caps on how much of disposable earnings can be taken
A good statement shows each deduction by name with its own current and year-to-date amount. "Misc: $212.40" is not a deduction line; it is a place where errors hide.
5. Net pay
Gross pay, minus pre-tax deductions, minus taxes withheld, minus post-tax deductions. If the statement also splits the payment across accounts, the direct-deposit allocation appears here and should sum to net pay to the penny.
A Worked Example, $2,000 Biweekly
A Pennsylvania employee paid 80 hours at $25.00, contributing 5% to a traditional 401(k), with $30.00 in post-tax union dues:
- Gross pay: $2,000.00
- Pre-tax 401(k): $100.00. This reduces wages subject to federal income tax to $1,900.00, but Social Security and Medicare wages stay at $2,000.00
- Federal income tax: call it $150.00 for illustration only — the real figure comes from the Publication 15-T method matching this employee's W-4, and there is no shortcut percentage for it
- Social Security: 6.2% of $2,000.00 = $124.00
- Medicare: 1.45% of $2,000.00 = $29.00
- Pennsylvania income tax: 3.07% of $2,000.00 = $61.40
- Union dues (post-tax): $30.00
- Net pay: $1,505.60
Every one of those lines belongs on the stub with a current-period amount beside a year-to-date amount. After ten such pay periods the YTD column reads gross $20,000.00, Social Security $1,240.00, Medicare $290.00, state $614.00, and 401(k) $1,000.00.
Why the Year-to-Date Column Matters
The current-period column tells you about one paycheck. The YTD column is where payroll is actually correct or incorrect.
Wage-base limits are invisible without it
Social Security tax stops for the year once Social Security wages reach the annual base. At 6.2% of the 2026 base of $184,500, the employee's Social Security tax tops out at $11,439.00 for the year (IRS Topic No. 751). A high earner's net pay jumps in the fall for no other reason, and the only line that explains the jump is YTD Social Security wages. The same logic runs the other way for the 0.9% Additional Medicare Tax, which begins once wages paid to the individual pass $200,000 for the year.
Your W-2 is built from it
The final stub of the year should tie to the W-2. Box 1 reports wages subject to federal income tax withholding, Box 3 reports Social Security wages with Box 4 the tax withheld, and Box 5 reports Medicare wages with Box 6 the tax withheld (IRS General Instructions for Forms W-2 and W-3). Box 1 is often lower than Boxes 3 and 5, and that is correct, not a mistake — traditional 401(k) elective deferrals reduce federal taxable wages but not Social Security and Medicare wages. In the example above, ten periods produce YTD Box 1 wages of $19,000.00 against Box 3 and Box 5 wages of $20,000.00.
That reconciliation has a deadline attached: Forms W-2 must be provided to employees by January 31, and filed with the SSA along with Form W-3 by the same date (IRS, employment tax due dates). Quarterly employment tax returns land on April 30, July 31, October 31, and January 31 for the prior fourth quarter.
It catches errors while they are still cheap
A wrong state code, a deduction that never started, a 401(k) percentage applied to the wrong base — none of these are visible in a single period, and all of them are obvious in a YTD column that drifts from expectation. Caught in period three, it is a small correction. Caught in January, it is an amended return.
It does not travel between employers
Each employer tracks its own YTD from zero. Change jobs mid-year and the new employer restarts the Social Security wage base, so combined withholding across two jobs can exceed the annual maximum. Both sets of YTD figures are what you need to sort that out on your individual return.
What Is Not on a Pay Stub
- The employer's own tax cost, in most cases. The matching 6.2% and 1.45%, plus federal and state unemployment tax, are the employer's expense, not a deduction from the worker, and many statements omit them entirely.
- Accrual balances, sometimes. Leave balances are a common courtesy line, not a universal one.
- Anything that did not happen. A pay statement is a record of pay actually earned and actually paid. If the hours, rates, and payments behind it are not real, there is nothing legitimate for a statement to report.
Producing a Statement That Shows All of This
UWageCo generates pay statements with all five blocks and both current-period and year-to-date columns, computing federal withholding from the Publication 15-T method and state withholding from each state's own published formulas, at $27.54 per statement with no subscription. It prepares documents from the figures you supply — it does not file anything with the IRS or with any state, and every statement it produces carries a disclosure stating that the information was supplied by the customer and was not independently verified. Filing, and the accuracy of the underlying payroll data, remain the employer's responsibility.