Quick answer
Pay stub deductions are amounts subtracted from an employee’s gross earnings before final net pay is calculated. Common deductions include federal income tax, Social Security, Medicare, state or local taxes, insurance premiums, retirement contributions, benefits, and legally required withholding.
Gross Pay − Taxes − Other Deductions = Net Pay
A pay stub lists the earnings and deductions behind a wage payment. Those lines — taxes, FICA, insurance, retirement — determine why the number you take home is smaller than the number you earned. This guide breaks down every common pay stub deduction in plain language, so the next time you look at your paycheck, you know exactly what each line means and why it’s there.
What Are Pay Stub Deductions?
A pay stub deduction is any amount withheld from an employee’s gross earnings before they receive their pay. Deductions fall into two broad groups: taxes required by law, and other withholdings either required by a legal order or elected voluntarily by the employee, such as insurance premiums or retirement savings. Together, these deductions explain the gap between gross pay (total earnings) and net pay (the amount actually deposited or paid out).
What Deductions Appear on a Pay Stub?
A typical pay stub itemizes deductions such as:
- Federal income tax withholding
- Social Security tax
- Medicare tax
- State income tax (in states that levy one)
- Local or city income tax (in some jurisdictions)
- Health, dental, or vision insurance premiums
- Retirement plan contributions (401(k), 403(b), or similar)
- Health Savings Account (HSA) or Flexible Spending Account (FSA) contributions
- Wage garnishments, when legally ordered
- Other voluntary benefits, such as life insurance or union dues
Mandatory vs. Voluntary Paycheck Deductions
Paycheck deductions split into two categories. Mandatory deductions are required by law and an employer has no discretion over them — federal income tax, Social Security, Medicare, applicable state and local taxes, and court-ordered wage garnishments all fall here. Voluntary deductions are elected by the employee, such as health insurance enrollment, retirement contributions, or supplemental life insurance. Voluntary deductions require the employee’s authorization, typically during benefits enrollment.
Federal Income Tax Withholding
Federal income tax withholding (often labeled FED or FIT) is the amount an employer withholds from each paycheck and sends to the IRS on the employee’s behalf, using taxable wages, pay frequency and the employee’s Form W-4 elections. It acts as a prepayment toward the employee’s total annual federal tax liability, reconciled when the employee files their tax return.
What Is FICA on a Pay Stub?
FICA stands for the Federal Insurance Contributions Act. It is the umbrella payroll tax that funds Social Security and Medicare, and it may appear as a single “FICA” line or be split into separate Social Security and Medicare lines. Employees and employers generally pay matching shares of regular Social Security and Medicare taxes. Additional Medicare Tax is employee-only; it has no employer match.
Social Security Tax
Social Security tax, sometimes labeled SS or OASDI (Old-Age, Survivors, and Disability Insurance), funds retirement, disability, and survivor benefits. As of recent tax years, the employee share is 6.2% of wages up to an annual wage base limit set by the Social Security Administration. Earnings above that limit in a given year are not subject to additional Social Security tax.
Medicare Tax
Medicare tax, labeled MED on many pay stubs, funds the Medicare health insurance program. The standard employee rate is 1.45% of all wages, with no annual wage base limit. Employees with wages above a certain threshold may also owe an Additional Medicare Tax of 0.9%, which their employer withholds once earnings cross that level.
2026 payroll deduction rates and thresholds to check
A deduction label does not tell you its entire tax treatment. Review the wage base, employee election and current-period amount behind each line. The table below covers regular U.S. employee wages; special cases and exemptions can differ.
| Pay stub line | How to review it |
|---|---|
| Federal income tax: FIT or FED | Use taxable wages, pay frequency and Form W-4 inputs. It is not one flat rate applied to every worker’s gross earnings. |
| Social Security: SS or OASDI | The regular employee share is 6.2%, up to $184,500 in Social Security wages for 2026. |
| Medicare: MED | The regular employee share is 1.45%, with no annual wage ceiling. |
| Additional Medicare | The employer begins employee-only withholding of 0.9% on wages it pays above $200,000 in the calendar year, regardless of filing status. |
Sources: IRS Social Security and Medicare guidance and Publication 15-T. State and local withholding uses separate rules. For example, California EDD lists a 1.3% SDI withholding rate for 2026 without a taxable wage ceiling.
A deduction example when Social Security reaches its limit
Assume a fictional employee already has $184,000 of Social Security taxable wages with this employer. The next $2,000 payment is fully covered by regular Social Security and Medicare rules, with no exempt benefits. Only $500 remains below the 2026 Social Security limit, so the employee’s Social Security withholding is $31. Regular Medicare is $29.
For the rest of this illustration, use $200 in placeholder federal withholding, no state/local withholding, a $100 traditional employee 401(k) contribution and a $50 post-tax deduction. Net pay is $2,000 − $31 − $29 − $200 − $100 − $50 = $1,590. The $200 is illustrative, not a W-4 calculation. The $100 contribution reduces federal income-tax wages under the example’s assumptions but does not reduce its FICA wages.
The smaller Social Security line does not mean every deduction should shrink. Insurance premiums, retirement elections and income-tax withholding have their own rules. Compare the individual lines before concluding that payroll made an error.
Check insurance, retirement and voluntary deductions
- Match an insurance deduction to the elected plan, coverage dates and employee share.
- Check whether a retirement line is traditional, Roth or another contribution type; do not assume every retirement deduction has the same treatment.
- Confirm the amount and authorization for voluntary deductions.
- Keep an employer contribution separate from deductions taken from employee pay.
- Ask payroll about an unfamiliar deduction before changing a document.
Why is federal withholding different from Social Security?
Income-tax withholding responds to W-4 inputs and taxable income. Social Security uses a separate tax base, rate and annual wage limit. They are not interchangeable amounts. Use the federal withholding tool with its disclosed assumptions, then compare with actual payroll.
Can one pre-tax deduction lower every tax?
No. Tax treatment depends on the plan and tax. Use the payroll system’s tax-specific wage bases rather than subtracting every pre-tax line from gross pay for all calculations.
Connect the deduction lines to the final statement
Use the Pay Stub Calculator for a breakdown, the Paycheck Calculator for a take-home estimate and the annotated example to see the fields together. Once the figures match your authorized records, open the generator to prepare the document.
State Income Tax Deductions
Many, but not all, states levy their own income tax, withheld similarly to federal income tax and labeled SIT (State Income Tax) or with the state’s abbreviation. A state with no wage income tax does not impose that tax, but residence, work location and interstate rules can affect other state withholding. Ask payroll which jurisdiction a line represents.
Local Payroll and Income Taxes
Some cities, counties, or school districts levy their own local income or payroll taxes on top of federal and state withholding. These appear as a separate line item, usually named after the specific jurisdiction, and only apply to employees who live or work in areas that impose them.
What Are Pre-Tax Deductions?
A pre-tax deduction reduces wages subject to a particular tax when the plan and tax rules allow it. It does not necessarily reduce every tax base. Traditional employee 401(k) deferrals generally reduce federal income-tax wages but remain subject to Social Security and Medicare. Qualifying health-plan deductions can have different treatment.
Example: one deduction, different taxable wages
Assume $2,000.00 of cash wages and a $100.00 traditional employee 401(k) deferral, with no other adjustments and wages below the Social Security wage limit. Federal income-tax wages are $1,900.00, while Social Security and Medicare wages remain $2,000.00. The $100.00 contribution is still deducted only once when reconciling net pay.
This illustrates wage bases, not the federal tax due. See the IRS 401(k) overview and IRS payroll-tax guidance. Use the federal withholding calculator for an estimate with its stated assumptions, then compare with actual payroll records.
What Are Post-Tax Deductions?
A post-tax deduction is subtracted after taxes have already been calculated and withheld, so it does not reduce taxable income. Roth 401(k) contributions, certain disability or life insurance premiums, and wage garnishments are typically taken post-tax.
Pre-Tax vs. Post-Tax Deductions
| Aspect | Pre-Tax Deduction | Post-Tax Deduction |
|---|---|---|
| When it’s subtracted | Before taxes are calculated | After taxes are calculated |
| Effect on taxable income | Reduces the applicable tax base; not necessarily every tax base | No effect on taxable wages |
| Common examples | Traditional 401(k), HSA, some health premiums | Roth 401(k), some insurance, garnishments |
Health Insurance Deductions
Health, dental, and vision insurance premiums are typically deducted each pay period to cover the employee’s share of the plan cost. These are often, but not always, pre-tax deductions, depending on how the employer structures the benefits plan.
Retirement Deductions
Retirement deductions represent money an employee contributes to a workplace retirement plan, such as a 401(k) or 403(b). A traditional contribution is pre-tax, lowering current taxable income, while a Roth contribution is post-tax, meaning it’s taxed now but typically tax-free when withdrawn in retirement.
Wage Garnishments
A wage garnishment is a court- or agency-ordered deduction an employer is legally required to withhold from an employee’s paycheck, often for unpaid child support, tax debt, or a judgment. Employers cannot decline to apply a valid garnishment order, and there are federal limits on how much of a paycheck can be garnished.
What Does YTD Mean on a Pay Stub?
YTD stands for year-to-date. It shows the running total of a specific figure — gross pay, a tax withheld, or a deduction — from January 1 of the current year through the current pay period. YTD totals help employees track annual earnings and withholding without adding up every individual pay stub.
Gross Pay vs. Taxable Pay vs. Net Pay
| Term | Definition |
|---|---|
| Gross Pay | Total earnings before any deductions are applied |
| Taxable Wages | The wage base for a specific tax after applicable exclusions or adjustments; federal income tax, Social Security and Medicare bases can differ |
| Net Pay | The final take-home amount after all taxes and deductions are subtracted |
Why Is My Net Pay Lower Than My Gross Pay?
Net pay is always lower than gross pay whenever any deduction applies, because net pay is defined as gross pay minus every tax and deduction taken out. For most employees, that difference reflects a combination of federal and applicable state/local tax withholding, FICA, and any elected benefits or retirement contributions.
Why Did My Paycheck Deductions Change?
Deduction amounts can change for several common reasons: a new W-4 or state withholding election, a raise that pushes part of your income into a new tax bracket, a change in benefits enrollment during open enrollment, reaching (or resetting after) the Social Security wage base limit, a new or ended wage garnishment, or a change in retirement contribution percentage.
How to Read Pay Stub Deductions
To read a pay stub accurately, work through it in order:
- Start with gross pay for the period.
- Identify each deduction’s tax treatment; check the wage base separately for each tax.
- Review each tax line — federal, Social Security, Medicare, and state/local if applicable.
- Review post-tax deductions, such as Roth contributions or garnishments.
- Confirm gross pay minus every deduction equals the net pay shown.
- Check the YTD column against your own running records if you keep them.
Common Pay Stub Deduction Abbreviations
| Abbreviation | Meaning |
|---|---|
| FED | Federal income tax withholding |
| FIT | Federal Income Tax |
| FICA | Federal Insurance Contributions Act (Social Security + Medicare) |
| SS | Social Security tax |
| OASDI | Old-Age, Survivors, and Disability Insurance (formal name for Social Security tax) |
| MED | Medicare tax |
| SIT | State Income Tax |
| 401K | Retirement contribution; check whether traditional or Roth |
| HSA | Health Savings Account contribution |
| FSA | Flexible Spending Account contribution |
| YTD | Year-to-date total |
| GARN | Wage garnishment |
| INS | Insurance premium (health, dental, vision, or life) |
Create a Professional Pay Stub Online
PayStubPro helps you create organized, professional pay statements that clearly show earnings, deductions, taxes, employer and employee information, and net pay — for legitimate payroll and recordkeeping purposes.
Count employee deductions once
For a statement showing $2,000.00 gross pay, $330.00 total employee taxes and $100.00 in employee benefits, net pay is $1,570.00. Do not subtract both a total-tax line and its component taxes. Likewise, an employer contribution shown for information is not automatically an employee deduction.
Use the line-by-line reading guide to compare current and YTD columns. If the payment is split between accounts, add the deposits before reconciling them to net pay.
What to Do If a Pay Stub Deduction Looks Wrong
If a deduction on your pay stub looks unfamiliar or incorrect, first check it against your benefits elections, most recent W-4, and any known garnishment orders. If it still doesn’t add up, or if gross pay minus total deductions doesn’t equal your net pay, raise it with your payroll or HR department promptly — most discrepancies are simple errors that are easy to correct once identified.
Why Understanding Your Pay Stub Matters
Understanding your pay stub deductions helps you verify you’re being paid and taxed correctly, plan a realistic budget around your actual take-home pay, catch payroll errors early, and make informed decisions about benefits and retirement contributions during open enrollment. A pay stub is more than a receipt — it’s a detailed record of exactly how your earnings become your take-home pay.
Frequently Asked Questions
What are deductions on a pay stub?
Deductions on a pay stub are amounts subtracted from gross pay before an employee receives their net pay. They include required withholdings like federal and state income tax, Social Security, and Medicare, as well as voluntary items like health insurance premiums and retirement contributions.
What are the most common paycheck deductions?
The most common paycheck deductions are federal income tax, Social Security tax, Medicare tax, state income tax (where applicable), health insurance premiums, and retirement plan contributions such as a 401(k).
Are all paycheck deductions taxes?
No. Some deductions, like federal income tax, Social Security, and Medicare, are taxes. Others, like health insurance premiums, retirement contributions, and wage garnishments, are not taxes at all — they are benefit costs or legally required payments unrelated to tax withholding.
What is the difference between gross pay and net pay?
Gross pay is total earnings before any deductions are taken out. Net pay, sometimes called take-home pay, is what remains after taxes and other deductions are subtracted: Gross Pay − Deductions = Net Pay.
What does pre-tax mean on a pay stub?
Pre-tax means a deduction reduces a particular tax base under the applicable plan rules. For example, traditional employee 401(k) deferrals generally reduce federal income-tax wages but not Social Security or Medicare wages.
What does post-tax mean on a pay stub?
A post-tax deduction is subtracted from pay after taxes have already been calculated and withheld. Roth 401(k) contributions, some disability insurance premiums, and wage garnishments are typically post-tax.
Why is taxable income different from gross income?
A pay stub may show different taxable wage bases for different taxes. A deduction that reduces federal income-tax wages may not reduce Social Security or Medicare wages. Compare the label and payroll treatment before using a taxable-wage figure.
What does FICA mean on my paycheck?
FICA stands for the Federal Insurance Contributions Act. It is the combined payroll tax that funds Social Security and Medicare, and it usually appears on a pay stub as one line or as separate Social Security and Medicare lines.
What does YTD mean on a paycheck?
YTD stands for year-to-date. It shows the cumulative total of earnings or deductions from the start of the calendar year through the current pay period, helping employees track annual totals across multiple paychecks.
Why are deductions different between employees earning the same salary?
Deductions vary based on individual choices and circumstances — filing status, Form W-4 credits and adjustments, elected benefits, retirement contribution percentages, state or local residence, and any wage garnishments can all differ between two employees earning the same salary.
Can an employer deduct money from a paycheck?
Whether a deduction is permitted depends on its purpose and applicable federal and state rules. Ask payroll for the authorization or legal basis of an unfamiliar deduction; consult the relevant labor agency when a dispute remains unresolved.
How can I tell if my paycheck is correct?
Compare your gross pay to your hours or salary, confirm each deduction matches your elected benefits and current tax situation, and verify that gross pay minus total deductions equals your net pay exactly. Review any unfamiliar line item with your payroll department.
Related Guides
- What Is a Pay Stub? A Complete Guide
- How to Create a Professional Pay Stub: Step-by-Step Guide
- How to Create a Pay Stub Online: Complete Step-by-Step Guide
- See a Pay Stub Example
- State Pay Stub Requirements
This article is for general educational purposes and is not tax, legal, accounting, or financial advice. Payroll and tax requirements vary by jurisdiction and individual circumstances.
Reviewed by Tony Juraska, July 2026.
Review the federal income-tax line
For a focused review of FIT or FED withholding, W-4 input units and changed amounts between statements, read federal income tax withholding on a pay stub.