How to Read a Pay Stub (And Spot the Errors That Cost You Money)

Most people glance at the take-home number on their pay stub and file it away. That's a mistake. Your pay stub is a receipt for your labor, and like any receipt, it can be wrong. Wage theft costs U.S. workers billions of dollars a year, and a huge share of it is sitting in plain sight on stubs nobody reads carefully.

The good news: a pay stub follows a predictable layout. Once you know what each block means, you can audit your own pay in about five minutes. Here's how to read every section and exactly what to check.

The header: who, when, and which period

The top of the stub identifies your employer, you, and the pay period. Two dates matter here. The "pay period" is the range of days you're being paid for. The "pay date" is when the money is issued. They're different, and the gap is normal.

Check that the pay period length matches what you expect. If you're paid every two weeks, the period should cover 14 days. A short or overlapping period can mean hours got dropped. Also confirm your name, the last four digits of your Social Security number, and your filing status are correct, because errors there ripple into your tax withholding.

The earnings section: where your money is made

This is the most important block. It lists each type of pay separately: regular hours, overtime hours, holiday pay, bonus, commission, and so on. Each line shows a rate, the number of hours or units, and a total. Add the line totals and you get your gross pay for the period.

Look specifically for a separate overtime line. If you worked more than 40 hours in a week and there's no overtime line, or the overtime rate equals your regular rate instead of 1.5 times it, that's a red flag. The overtime rate on a $20/hour job should read $30.00, not $20.00. You can confirm the correct figure with the overtime calculator.

Most stubs also show year-to-date (YTD) totals next to current totals. The YTD column is useful for catching a problem that's been repeating for months rather than just this check.

The tax withholding lines

Below earnings you'll find taxes withheld. Federal income tax depends on your W-4 elections and your earnings. Then come the two FICA taxes, which are fixed percentages: Social Security at 6.2% of wages (up to the annual wage cap) and Medicare at 1.45%. These two you can check with simple multiplication.

Most workers also see state income tax, and some see local or city tax. Nine states, including Texas, Florida, Washington, and Nevada, have no state income tax, so those lines will be blank or absent. If you see a state tax for a state you don't live or work in, flag it, because that's a setup error that can take months to refund.

Federal withholding is harder to verify by hand because it's based on tables and your W-4. But Social Security and Medicare should always foot to 6.2% and 1.45% of your gross. If they don't, something is off.

Deduction codes: decoding the alphabet soup

After taxes come deductions, and this is where stubs get cryptic. You'll see abbreviations like MED or MEDICAL (health insurance), DEN (dental), 401K or RET (retirement), HSA or FSA (pre-tax health/childcare accounts), LIFE (life insurance), and sometimes GARN (a court-ordered wage garnishment).

Pre-tax deductions (like 401(k), HSA, and most health premiums) come out before income tax is calculated, which lowers your taxable wages. Post-tax deductions come out after. The distinction explains why your taxable wages on the stub can be lower than your gross.

Match every deduction to something you actually signed up for. An unexplained deduction, a benefit you cancelled, or a union due you never authorized is money leaving your pocket. Employers in many states can't lawfully deduct for things like cash-register shortages, broken equipment, or uniforms if doing so drops you below minimum wage.

The four checks that catch wage theft

First, check hours. Compare the regular and overtime hours on the stub to your own record of when you clocked in and out. If you don't keep a record, start now, even a notes app works, because in a dispute your records can carry real weight.

Second, check the overtime rate. Anything over 40 hours in a workweek should be paid at 1.5 times your regular rate, and that regular rate has to include nondiscretionary bonuses and commissions. A bonus week with no bump to the overtime rate means you were underpaid.

Third, check minimum wage. Divide your gross by your total hours. If the result is below your state or local minimum wage, you have a problem, and this is the most common way tipped workers get cheated. Fourth, check the math across the whole stub: earnings minus taxes minus deductions should equal your net pay exactly. If the lines don't add up, ask payroll for a written explanation.

Frequently asked questions

Does my employer have to give me a pay stub? Federal law doesn't require one, but most states do, and many require specific details like hours, rates, and deductions. California, New York, and others impose penalties for stubs that are missing required information, so a vague or incomplete stub can itself be a violation.

What if my pay stub doesn't show my hours? For non-exempt (hourly) workers that's a warning sign, and in many states it's illegal. Without hours on the stub, neither you nor anyone reviewing your pay can confirm overtime was paid correctly. Request an itemized statement in writing and keep the response.

How long should I keep my pay stubs? At least two to three years. Federal wage claims under the FLSA reach back two years, or three for willful violations, so a stack of old stubs is exactly the evidence you'd need to prove a back-pay claim.

Audit your next stub

The next time you're paid, don't just check the deposit amount. Spend five minutes running the four checks: hours, overtime rate, minimum wage, and whether the lines add up. Keep a copy of every stub and a simple log of your hours.

If the overtime rate looks wrong or the hours don't match what you worked, plug your real numbers into the overtime calculator to see what you should have been paid. A pay stub you actually read is one of the cheapest forms of financial protection you have. For the rules in your state, the U.S. Department of Labor's Wage and Hour Division is the authoritative starting point.