The Complete Guide On How To Read A Pay Stub

how to read a pay stub paycheck information

Is it your first time to get a full-time job that gives paychecks? Are you having a hard time reading a paystub? Do you want to understand what the various parts of the pay stub mean? 


Over 22 million Americans lost their jobs in April because of the pandemic. The likeliest outcome is that people will live paycheck to paycheck due to the crisis. Today, as we find more ways to fight the crisis, people are coming back into the workforce. 

You must know how to read a pay stub no matter what industry you’re in or what your job is. In this guide, we’ll help you improve your understanding of a paycheck stub and how it works. Keep reading to learn more about pay stubs and how to read them. 

1. What Is In A Pay Stub? 

Before we go on, let’s define what a pay stub is for a quick second. Companies and businesses generate pay stubs to help employees keep track of their income. Pay stubs are your record of the pay you received, complete with the details about the pay. 

To better learn to read a pay stub, you first need to know what the parts mean. Below, we’ve got a list of the details and terms you’ll see in a typical pay stub. Note that pay stubs may differ in appearance depending on the company, but they all carry the same info. 

Basic Details In A Pay Stub 

Some of the first things you’ll see at the top of your pay stub are basic information. This includes your full address as well as your employer’s. Both these pieces of information need to be up-to- date and accurate. 

If your company includes it in your pay stub, you’ll also see identifying information. It may be in the form of an employee ID number or Social Security number. 

You’ll see included is pay type, which is often either per hour or salary. You’ll also spot the date that the employer issued the paycheck. This is the date when you’d receive your paycheck. Next to that is the pay period or the time frame that your pay stub covers. 

Other Parts Of A Typical Pay Stub 

After the basic details, the next thing you need to know is the next part of a pay stub. This includes your total earnings, taxes, and final payment. Now, you may be wondering about a few things. 

What are the gross earnings on a paystub? How does it differ from net pay? Not everyone knows what they are, so let’s define what some of these words mean. 

The gross pay that’s written on the paycheck stub is the total pay. That’s how much you’d get before the taxes, and other deductions get taken out. This is different from the net pay, which is the final pay or final amount after the deductions. 

2. How To Read Your Paycheck Stub 

Now that you’ve got all the details down, let’s study how one reads a pay stub. Whether it’s old or new, we want you to take a pay stub. Let’s read it together. 

First, let’s take a look at the top. Check that all the basic information about you and your employer are correct. If something is missing or erroneous, it’ll be the fault of the payroll department or company. 

After you’ve checked that all the basic information is correct, let’s take a look at the two most important aspects. Go to the gross pay. As we mentioned, this is the earnings you’d get in a pay period before any withholdings. 

This is often the largest number in the pay stub. This also excludes other earnings like bonuses. Knowing what your total wage is useful so that you know what your typical income is. 

What is your earned income on the pay stub? This is the next aspect we move to. You may also know it as the net pay or final pay. Remember, this is the total money after taxes that you’ll bring home. 

3. How To Know What Taxes And Withholdings Got Taken 

Now, you may be wondering how you can ensure that all the items on the pay stub got calculated right. With the gross pay and net income in mind, let’s jump to the middle. We’re taking a closer look at the withholdings and taxes. 

Under taxes, check how much the federal tax (FT or FWT) and state tax (ST or SWT) amounts are. This is how much you give back to the government as taxes. State taxes are payments that go to public projects like health care. 

Note that not all states collect an income tax and state tax will differ per state. If you want to file for exemptions on your federal tax, fill out a new W-4 form. Ask the human resources department for help if you need any and to change the W-4 form for you. 

After the taxes, check other deductions like Social Security (SS or SSWT) and Medicare (Med or MWT). Social security payments go to finance your retirement. This is a contribution that’s worth 6.2% of your income. 

Medicare payments are worth 1.45% of your paycheck. If you don’t find Medicare under your pay stub, look for an item labeled FICA instead. FICA may also include social security. 

If you want to know what the other abbreviations mean on your pay stub, talk to human resources. 

4. Why Learn How To Read A Pay Stub? 

Now, you know how to read a pay stub. The question you may now be thinking is why it matters. The first reason is so that you can see and understand where your money goes. 

Next, you want to avoid any mistakes. Indeed, your pay stub goes through a few people first. However, they can still miss errors and give you the wrong payment for a pay period. 

It helps to be able to understand your pay stub so you can spot any errors. Even before the peak of the Coronavirus, 49% of Americans already expected to live paycheck to paycheck this year. If there are errors on your pay stub, bring it up with HR or the payroll department. In times like these, every cent counts. 

Get a Better Understanding Of Your Pay Stubs 

Now you know how to read a pay stub. We hope you now know what’s written on your pay stub. Of course, handling your finances only starts here. If you want more informative guides on paycheck stubs, check out our other content on other financial documents and employment information. We provide tons of financial guides and lists for you to discover, right here!