Paycheck 101

A pay stub is one subtraction problem wearing a lot of jargon: what you earned, minus taxes, minus deductions, equals what landed in your account. Here's every line in that subtraction, in the order it happens — read it once and stubs stop being noise.

Gross pay — the number you negotiated

Salary divided by pay periods, or hours × rate plus overtime, bonuses, and differentials. Everything below subtracts from this. If gross itself looks wrong, that's a math error worth catching early — the paycheck checker rebuilds what it should be from your hours and rate, and the frequency converter translates salary into any period. (Paid biweekly? Two months a year deliver a third check — that's a feature, not an error.)

Pre-tax deductions — money that skips the taxman

Traditional 401(k) contributions, most health/dental/vision premiums, HSA and FSA dollars come out BEFORE taxes are computed — so each pre-tax dollar only costs you roughly 70–80 cents of take-home. This is why the 401(k) match is such a cheat code: pre-tax money going in, free employer money on top. The per-paycheck 401(k) calculator shows exactly how a contribution change moves your deposit.

FICA — the flat one nobody escapes

Social Security (6.2% up to an annual wage cap) plus Medicare (1.45%, no cap): 7.65% of nearly every dollar. Your employer quietly pays a matching 7.65% on top — which is exactly what you inherit both halves of if you go 1099. High earners see Social Security stop mid-year (the cap) and a small extra Medicare percentage kick in — both normal, not errors.

Federal withholding — the estimate, not the tax

The biggest line and the most misunderstood: withholding is a PREPAYMENT guess based on your W-4, not your actual tax. Too much withheld = a refund next April (you made the IRS an interest-free loan); too little = a bill. The W-4 withholding calculator tunes it. And the famous "my bonus got taxed at 40%!" — that's just the flat 22% supplemental withholding plus FICA, reconciled at filing. The bonus tax calculator shows the real number.

State and local — the zip-code line

Anywhere from zero (Texas, Florida, and friends) to 10%+ (California's top brackets), plus city taxes in a few places. This line is why identical salaries take home very different amounts across a state line — worth pricing before a move with the relocation calculator.

Post-tax deductions — the leftovers

Roth 401(k) contributions, some insurance types, union dues, and — if a court ordered it —garnishments. Roth deserves a special note: it hurts more per paycheck than traditional (no tax break now) in exchange for tax-free withdrawals later.

Net pay — and what to do with it

What's left is the deposit. Two habits turn this from trivia into money: check the stub when anything changes (new job, raise, benefits enrollment — payroll errors compound quietly, and the real raise calculator verifies a raise actually arrived), and give the net a job the day it lands — the 50/30/20 paycheck budget splits it in one step. First paycheck at a new job looking odd? It's usually proration — the prorated salary calculator and first paycheck guide decode it.