How to Read a Pay Stub: A Simple Guide

How to Read a Pay Stub A Simple Guide from North Carolina Lifestyle Blogger Adventures of Frugal Mom

If you want to get a hold of your finances and be in the know of exactly what you are earning at work and what you are paying Uncle Sam you have to learn how to create a pay stub and how to read it as well. When you first look at a paystub it might seem confusing or you might only understand the date you received your check and the total amount you received. 

We are here to break down your pay stub, section by section to help you understand this important piece of paper you receive either weekly or biweekly.


This is probably everyone’s favorite part. Here, you will know how many hours you worked and how much you received for those hours. If you receive hourly pay, it will also include your hourly rate. If you worked overtime, it will also show how many extra hours you worked and how much you received for each hour. 

If you receive a salary it will probably default the hours to 40 and show your salary earnings for that pay period. If there are any commissions, tips, or bonuses paid out during the pay period, it will list this under the employee earnings as well.

The gross earnings total is the amount you made before any taxes were taken out. The net pay or the net earnings is the amount you receive after the taxes, deductions, and contributions for health insurance come off from the gross pay. Normally, the net pay is the number that most people look for to know how much money they actually have to take home.

If you ever need to know exactly how much you have made since the beginning of the year you can easily find this under the “Year To Date” column. 


The Federal Tax Amount section in your pay stub will help you learn what the total amount was taken out of each check and given to Uncle Sam. If you live in a state that also withholds state taxes, the section that says State Tax Amount will show the amount given to the state out of each check. State taxes typically go to state projects, including education projects, highways, and roads, and sometimes towards health care.

The amount that is withheld and paid towards taxes depends on how many exemptions you claim on your W-4 tax form when you first started working for the company. If you ever need to make changes to the number of exemptions, contact your human resources department and have them issue you a new W-4 form to fill out.


The Medicare section in your withholdings area will show the total taken out to go toward the Medicare program. This program can help with medical payments and billing once you reach the eligible age to collect social security. This payment is not optional and mandatory not only for you but also for your employer to match the 1.45% that is required by law.

Another withholding you will find in your pay stub is Social Security. This is another mandatory payment that is taken out and goes towards the social security system. You can access monthly payments from your social security when you reach the age to collect social security

You can start receiving Social Security benefits as early as 62, but they will not be the full amount. If you wait until you are 65, you will receive the entire amount that you, in essence, saved from each paycheck during your working years.

If you pay for dental, health insurance, or retirement, this will be included in the withholdings or deductions section. 

All of these withholdings will have two columns. One column will display the current amount being taken out for that pay period, and another column will show you the Year to Date deductions. The year-to-date will help you see the total you have paid since the beginning of the year for each amount withheld.


If your employer makes any contributions to your healthcare or retirement, this will be under the contributions section. This section will also show you the current contributions taken out of that pay period and the total taken out since the beginning of the year in the “Year to Date Column” (YTD).

Basic Information

All the way at the top of your pay stub you will find basic information from yourself and your employer. This will include things like names, addresses, the dates you are being paid for, and the date the check was issued. 

If another company handles payroll, you will also find information about the company processing payroll for the company you are working for. If something is wrong with your check, it is more than likely an oversight from the company handling payroll. If you ever notice a problem, it is best to contact human resources right away. 

Sometimes a check stub maker is used by employers to make payroll easier and to keep everything organized.

Now You Know How to Read a Pay Stub

Now that you understand how to read a pay stub, you can teach your co-workers if they need a quick lesson. This will also help you catch any mistakes as they come up and you will know how to keep track of how much money you have earned to date, in turn, this can lead to helping you improve your finances. 

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