A Basic Guide on How to Read a Pay Stub


Do you need a refresher on how to read a pay stub? A pay stub from your employee gives you vital information about how many hours you worked and what you’ve earned. During tax season, or if you’re trying to apply for a loan or an apartment, it’s essential to know the information it has on it.

If you need help with reading a pay stub, keep scrolling because, in this article, we are giving everything you need to know how to read one.

What is a Paystub?

A pay stub is a paper attached to your paycheck that has vital information about your earnings. Check here to find a variety of payroll check templates. Federal law does not require an employee to provide a pay stub. They do, however, require to provide some type of written pay statement.

A pay stub can be given as a paper statement or electronically sent through an online payroll system. 

How to Read a Paystub?

Your paystub will be the perforated part of your paycheck. Typically a pay stub has sections that give you information about the following.

Gross Earnings

Gross Earnings is the employee’s taxable income or the entire amount of dollars earned within the specific pay period. This amount doesn’t have any taxes taken out or other deductions withheld. 

This section also specifies the pay period, the rate per hour, and the number of hours the employee worked. This section also includes extra earnings, such as time-and-a-half or overtime.

Employee Taxes Withheld 

This section will give you a list of all the taxes taken out of your check for the pay period. This usually includes the following.

  • Federal Income Tax
  • State Taxes
  • City and local Taxes
  • Federal Insurances Contributions Act (FICA)

This section could also include other types of local or state taxes. This depends on your area, so check with your state for more info on tax deductions.

Other Pay Stub Deductions

Besides Regular governmental taxes, you are also responsible for other types of pay stub deductions.

These deductions can include but are not limited to the following.

  • Savings Account
  • 401k
  • Retirement Fund
  • Insurance Coverage
  • Childcare Costs
  • Alimony
  • Child Support
  • Garnished Wages

There also could be a subsection on your paystub that lists employer contributions. This refers to any other deductions that the employer is responsible for, such as training costs or work stipends.

Net Pay

The net pay is essentially your take-home pay. This is the amount you will take home with all of the taxes and deductions are taken out of your gross pay.

Always review your net pay and od your calculations to ensure the accuracy of your paycheck. If you find a discrepancy with your net pay, be sure to communicate with your payroll department to resolve the issue.

Why Is a Pay Stub Important?

A pay stub is important because it reassures you that you are being paid the correct amount. It is also a form of income verification. This is especially important because most banks, lenders, and apartment leasing companies require a pay stub to verify your employment.

We hope this article gave you some clarification on how to read a pay stub if this article helped you be sure to check out more of our informative articles on our page.

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