Payroll 101

How to Read a Pay Stub

Your pay stub explains the gap between what you earn and what lands in your bank. Here’s every section decoded — gross pay, taxes, deductions, net pay, and those cryptic abbreviations.

The Five Parts of Every Pay Stub

Formats vary by employer and payroll provider, but almost every pay stub has the same five sections:

Gross pay — total earnings before anything is taken out (salary, hourly, overtime, bonuses, commissions).
Taxes withheld — federal income tax, Social Security, Medicare, and state/local income tax.
Pre-tax deductions — 401(k), health insurance premiums, HSA/FSA — subtracted before tax, lowering your taxable pay.
Post-tax deductions — Roth 401(k), garnishments, union dues — taken after tax.
Net pay — your take-home: gross minus taxes minus deductions.

Pay Stub Abbreviations, Decoded

The codes that confuse everyone:

Code	What it means
FIT / FED / FITW	Federal Income Tax withheld
FICA	Social Security + Medicare (the payroll tax)
OASDI / SS	Social Security (6.2% of wages up to $184,500 in 2026)
MED / FED MED/EE	Medicare (1.45% of all wages)
SIT / State	State Income Tax withheld
YTD	Year-to-Date — the running total since Jan 1
Gross	Earnings before deductions
Net	Take-home pay after deductions

Gross Pay vs. Net Pay

The single biggest source of pay-stub confusion. Gross is what you earn; net is what you keep. The difference — often 20–35% — is taxes and deductions. A $5,000/month gross salary might net around $4,199 for a single filer in a no-tax state. See exactly where it goes →

Check These Every Payday

Hours and rate are correct (and overtime is paid at 1.5×).
Filing status and allowances match your W-4 — wrong settings mean a surprise tax bill or an over-large refund.
401(k) and benefit deductions are the amounts you elected.
YTD totals climb sensibly — useful at tax time and for loan applications.

Free download: grab the printable Pay Stub Decoder — every code and line on one page, with 2026 rates, to keep by your desk.

Get the printable Pay Stub Decoder →

Frequently Asked Questions

What does OASDI mean on my pay stub?

OASDI is Old-Age, Survivors, and Disability Insurance — the formal name for Social Security. It is 6.2% of your wages up to the $184,500 wage base in 2026.

What is the difference between gross and net pay?

Gross pay is your total earnings before anything is withheld. Net pay is your take-home after taxes and deductions — the amount actually deposited.

What does YTD mean on a pay stub?

Year-to-Date: the running total of earnings, taxes, or deductions since January 1. It resets each new year.

Why is my net pay so much lower than my salary?

Federal income tax, Social Security (6.2%), Medicare (1.45%), state tax, and pre-tax deductions like 401(k) and health insurance all come out first — typically 20–35% of gross.

How much tax is taken out · What is FICA tax · How to fill out a W-4 · Paycheck calculator