How to Read Your Paycheck, Line by Line (2026)

Header: the period and the date

The pay period start and end dates say which days the paycheck covers; the pay date says when it is paid, usually a few days to two weeks after the period ends («arrears»). A paycheck dated January 2 for a period ending December 27 is 2026 income for tax purposes — the pay date decides the year, not the work — which is why the last stub of the year and the W-2 sometimes seem to disagree by a period. The employee ID, the department and the tax filing status on file (S-0, M-1 and similar codes on older systems; «Single, 2 dependents» on newer) are the settings the rest of the stub was computed from, and the first thing to check when a line looks wrong.

Earnings: how the gross was built

Each type of pay on its own line with hours, rate, current amount and year-to-date: REG or Regular (salary for the period, or hours × rate), OT or Overtime (hours × 1.5 × rate; the premium half must be visible or computable, since from 2026 it is deductible), HOL, VAC or PTO (paid time off used, at the regular rate), BONUS, COMM, TIPS (reported tips, added to gross and then subtracted again lower down as «tips paid» because you already have them), RETRO (back pay). The total is gross pay. Check: hours match your records; the overtime rate is 1.5× the regular rate including any shift differential; a salaried period equals salary ÷ periods — $2,307.69 biweekly on $60,000.

Taxes: the five lines and what each should equal

FIT / Fed W/H / Federal income tax: from the W-4 through the Pub 15-T tables; $193.08 on $2,307.69 single with no adjustments, less with dependents or the married table, more with extra on 4(c). OASDI / SS / FICA-SS: 6.2% of FICA wages (gross minus §125 deductions), $143.08 here, until year-to-date wages pass $184,500. MED / HI / FICA-MED: 1.45% of the same base, $33.46, plus 0.9% above $200,000 year-to-date. SIT / State W/H: from the state form and the state's tables, zero in nine states, $63.06 in California on this paycheck. Local / City / SDI / PFL: local income tax where one exists, and in California, New York, New Jersey, Washington and a few others, the state disability or paid-leave insurance contribution. Check Social Security first: if it is not 6.2% of gross, either §125 deductions explain the gap or something is wrong.

Deductions: before and after tax

Pre-tax: 401(k) or 403(b) (reduces FIT and SIT bases, not FICA), MED / DEN / VIS premiums, HSA, FSA, commuter (all §125: reduce every base). After-tax: ROTH, union dues, GARN or garnishment (limited by federal law to 25% of disposable earnings for most debts, more for child support), life insurance above the employer-paid $50,000, charitable payroll giving, loan repayments. A stub with $138.46 of 401(k) and $80 of health premiums on $60,000 shows FIT lower than the no-deduction figure, OASDI and MED lower by 7.65% of $80, and net of $1,751.95. Check: each deduction matches your election; a premium that changed at open enrolment changed on the first paycheck of the plan year and not before.

Year-to-date and the W-2 check

Every column has a year-to-date twin, running from the first pay date of the year. They drive the Social Security cap and the Additional Medicare threshold, and they are what the W-2 will show: box 1 (federal wages) should equal year-to-date gross minus 401(k) minus §125; box 3 (Social Security wages) should equal gross minus §125, capped at the wage base; box 5 (Medicare wages) the same uncapped; box 2 the year-to-date FIT; boxes 4 and 6 the year-to-date OASDI and MED. If the last stub of the year and the W-2 disagree, the stub is usually the one missing a correction, and the employer owes an explanation or a W-2c.

A worked example: $45,000 in Colorado, paid twice a month

Take $45,000 a year in Colorado, paid twice a month (24 paychecks), single, standard W-4, no pre-tax deductions. The gross per paycheck is $1,875.00. Federal income tax withholding, from the 2026 Publication 15-T percentage method, takes $134.17. Social Security takes 6.2% of gross, $116.25, and Medicare 1.45%, $27.19. Colorado withholds $52.98 under its flat rate and deductions. The net deposit is $1,544.41, 82.4% of gross; over the year that is $37,066 from $45,000, an effective rate of 17.6% on all taxes together. Every line is reproducible from the documents on the sources page, and the table below lists them in the order they appear on a stub.

Two things on that stub are not obvious from the totals. First, the federal line is withholding, not tax: the tables annualise this paycheck as if all 24 were identical, and the year's actual tax, $3,220, differs from the $3,220 withheld by $0, which becomes a refund in April. Second, Social Security and Medicare are the same fraction of every paycheck of the year, because the salary is under the wage base, and no form can change them; only Section 125 deductions reduce their base. The reading guide walks each line and names what it should equal.

Nearby salaries: what $25,000 to $80,000 leave in Colorado

A raise or a job offer is rarely at the round number on this page, so here is the ladder around it: the same twice a month paycheck at 6 salaries from $25,000 to $80,000, single, standard W-4, no deductions. The effective rate climbs from 12.8% to 22.1% across the range because federal income tax is progressive while FICA is flat; each extra $10,000 of salary leaves less than the last, and the pay raise calculator prices any step exactly. The salary after tax pages carry the full range, one page per amount.

Reading the ladder the other way answers the interview question: to take home $10,000 more a year in Colorado takes a raise of roughly $12,841 in gross at this level, because the new dollars are taxed at the marginal rate rather than the average. The state column grows in a straight line, since Colorado charges one rate; the FICA column grows in a straight line until the wage base. The gross-up calculator runs the reverse computation for any net.

The same paycheck under each filing status

Filing status is the one W-4 line everyone fills in, and it moves the federal line more than most people expect. On $45,000 in Colorado, paid twice a month, a single filer is withheld $134.17 per paycheck; married filing jointly (one income) $53.33, because the joint table doubles the standard deduction to $32,200 and widens every bracket; head of household $89.50, with its $24,150 deduction and its own brackets. Married filing separately uses the single table. Colorado's own deductions and brackets are the same for joint filers, which is why the state column moves too. Picking «married» with two incomes and skipping step 2 is the commonest cause of an April bill; the W-4 guide covers the choice.

The last column shows why the status matters beyond the paycheck: the year's federal income tax on $45,000 is $3,220 single and $1,280 married filing jointly on one income, a difference of $1,940 that the W-4 status either delivers through the year or holds back for a refund. Head of household is the status most often missed by single parents, who leave $1,072 a year on the single table. FICA is identical in every row, since it has no status.

The whole year on $45,000: withholding, tax due, and the settlement

24 paychecks of $1,875.00 withhold $3,220 of federal income tax over 2026. The tax actually due on the return, with the $16,100 standard deduction and no credits, is $3,220, so the year ends with a refund of about $0 — the gap between the withholding tables' approximation and the exact computation. The marginal rate on the last dollar is 12%; the effective rate on all taxes together is 17.6%. Social Security applies to every paycheck of the year, because $45,000 is under the $184,500 wage base. The 2026 deductions for overtime premium and tips apply at filing to anyone with qualifying pay; they do not change these paychecks. Colorado takes $1,272 for the year, 2.8% of salary.

Refund or bill: what the year settles

Withholding is a prepayment; the return computes the tax and returns or collects the difference. On $45,000 with these settings the year withholds $3,220 against $3,220 due, so the settlement is a refund of about $0. A refund is money lent to the Treasury at no interest for up to sixteen months; a bill is fine up to a point and penalised beyond it. The point is the safe harbour: withholding of at least 90% of this year's tax ($2,898 here) or 100% of last year's (110% above $150,000 of income) avoids the underpayment penalty, which is interest on each quarter's shortfall. These paychecks clear the 90% harbour on their own.

What makes the settlement move: credits the W-4 does not carry (the earned income credit, education credits, the 2026 overtime and tip deductions), which enlarge the refund; a second income, other income, or too many dependents on the form, which produce the bill; a bonus withheld at the flat 22% when the marginal rate is 12%, which over-withholds at this salary; and a change of job or a partial year, which annualises each paycheck wrongly. The W-4 fixer sets the lines that bring the settlement to zero, or to a chosen refund.

What deductions do to this paycheck

Deductions are where the same salary produces different paychecks. A 6% traditional 401(k) contribution — $112.50 per paycheck on $45,000, well under the $24,500 annual limit — reduces federal and state taxable wages but not FICA wages, so it costs $94.05 of take-home rather than its face value. A $150 Section 125 deduction for health premiums or an HSA reduces every base including FICA, and costs $113.92. A Roth contribution of the same 6% comes out after tax and costs the full amount now in exchange for tax-free withdrawals later. The table gives each case for this paycheck; the pre-tax deductions calculator runs any amount and the 401(k) calculator draws the whole curve.

The order matters on the stub as well as in the arithmetic. Section 125 items come off first and reduce the FICA wages line, which is why a health premium lowers the Social Security and Medicare figures by 7.65% of itself; the 401(k) comes off next and reduces federal taxable wages only. Both appear in the W-2: box 1 (federal wages) is gross minus both, boxes 3 and 5 (Social Security and Medicare wages) are gross minus the Section 125 items alone. An employer match, where there is one, is added on top of the contribution and never touches the paycheck; the compare two jobs tool values it.

What each W-4 line does to this paycheck

The federal line is the only tax on the stub that a form can change, and each step of the W-4 moves it by a predictable amount. One qualifying child on step 3 lowers withholding by $91.67 per paycheck — the $2,200 credit spread over 24 paychecks — taking the net to $1,636.08. Checking box 2(c) for a second job raises it by $94.37, because the checkbox table halves the brackets so that each job is withheld as if it earned half the household income. Extra withholding on 4(c) is dollar for dollar. Other income on 4(a) adds the tax on it at the marginal rate; deductions on 4(b) remove it. The table runs each case for $45,000 in Colorado; the W-4 fixer computes the combination that makes the year's withholding equal the year's tax.

None of these lines changes the tax; they change when it is paid. Claiming a child that is not yours on step 3, or deductions you will not take on 4(b), enlarges every paycheck and produces the same amount plus a penalty in April. The lawful levers are the ones you are entitled to — the children you have, the deductions you will itemise, the second income you must account for — and the fixer applies exactly those. A new W-4 takes effect from the next payroll run after your employer receives it, and the year-to-date withholding already taken is not recomputed.

$45,000 in Colorado against nine other states

Federal tax and FICA are the same everywhere; the state line is what moves. On $45,000 paid twice a month, the nine states with no wage tax leave $1,597.39 per paycheck; California leaves $1,564.78, $32.61 less, or $783 over the year. Flat-rate states sit in between and their rate is the whole story; bracket states depend on the salary. Prices move more than taxes between most of these states, and the state pages carry the BEA price index beside the take-home; the state ranking sorts all 51 for any salary.

Two cautions before reading the table as a moving guide. The state taxes wages where the work is done, with the resident state taxing everything and crediting the work state, so a remote job does not change the column unless you change where you live — and five states apply a «convenience of the employer» rule that keeps taxing remote work done elsewhere. And the no-tax states collect the difference elsewhere: property tax in Texas and New Hampshire, sales tax in Tennessee and Washington. The no-income-tax guide and the local taxes guide cover both.

A raise on $45,000: what arrives

A raise is taxed at the margin, so what reaches the account is the raise minus the marginal federal rate, FICA and the state's marginal rate on the new dollars only. A 3% raise on $45,000 in Colorado adds $56.25 of gross to a twice a month paycheck and $42.72 of net, 75.9% of it; against 3% inflation it is a real raise of about 0.0%. Nothing about the raise changes the tax on the salary below it — the «pushed into a higher bracket» fear describes arithmetic that does not exist in a progressive system. The table runs three sizes; the pay raise calculator runs any, with the inflation figure you enter.

The errors payroll actually makes

Wrong state — a remote employee withheld for the office's state instead of the home state. Old W-4 — a form from a previous job or a previous marriage still driving the table. Wrong FICA base — a §125 deduction set up as after-tax, or a 401(k) set up as §125. Missed cap — Social Security withheld past $184,500 (refundable through the employer). Overtime at 1.5× the base rate without the shift differential or bonus included in the regular rate. Unpaid hours on a salaried non-exempt employee. The stub checker compares your stub's lines with the computed ones and names the largest gap; anything that survives the check goes to payroll in writing, and to the state labor department if payroll does not answer.

The three taxes on a paycheck, and why they behave differently

Federal income tax is progressive and starts from zero: the first $16,100 a single filer earns in 2026 is untaxed because that is the standard deduction, and the rate then climbs through seven brackets from 10% to 37%. It is the only line your W-4 changes. FICA is flat from the first dollar — 6.2% for Social Security up to $184,500 of wages and 1.45% for Medicare without limit — and no form changes it. State income tax is whatever your state decided: nothing in 9 states, one flat rate in 13, brackets in the other 29, and 11 states let a city or county add a line of their own.

On the $2,307.69 biweekly example above: $193.08 of federal withholding, $176.54 of FICA and $0.00 of Texas tax. Keeping them on separate lines is the point: a 401(k) contribution moves the first and third but not the second; a raise moves all three at different rates; the Social Security cap moves only the second. A single «taxes» figure hides which lever does what.

Pre-tax deductions: what each one really costs

A $250 contribution to a traditional 401(k) does not cost $250 of take-home. It comes out before federal income tax (and before state tax in most states), so at a 12% marginal rate the paycheck falls by about $220.00. What it does not escape is FICA: the IRS is explicit that elective deferrals are wages for Social Security and Medicare, so the saving is the income tax rate, not the income tax rate plus 7.65%. Health premiums, HSA and FSA contributions through a Section 125 plan are the exception and escape FICA too: the same $250 through an HSA costs about $200.88 of take-home.

After-tax deductions — a Roth 401(k), union dues, garnishments, post-tax life cover — reduce nothing but the deposit, and still belong in the calculation because the deposit is the number that matters. On a $2,307.69 paycheck, the 401(k) calculator draws the cost curve one percent at a time and the pre-tax deductions calculator compares the two kinds side by side.

What changed in 2026

The standard deduction is $16,100 single, $32,200 joint and $24,150 head of household; every bracket threshold moved up with inflation; the Social Security wage base is $184,500; the 401(k) elective limit is $24,500. Each is read from the document that sets it — IRS Revenue Procedure 2025-32, the SSA's contribution and benefit base, IRS Notice 2025-67 — and listed with its source under the calculator.

The bigger change is the set of new federal deductions: qualified overtime premium pay up to $12,500 ($25,000 joint), reported tips up to $25,000, and $6,000 more for each person aged 65 or over, all phasing out above $150,000 of income. None of them changes what an employer withholds, because Publication 15-T does not know about them; they reduce the tax owed at filing, which is why the calculators on this site show them in the «withholding vs what you owe» box rather than on the paycheck. The what changed in 2026 guide keeps the dated list, including state changes.

Common mistakes

Not checking OASDI first. It is the easiest line to verify and the one that exposes a base error. Reading the pay date's year from the work dates. The pay date decides. Ignoring the filing status printed on the stub. It is the setting everything else came from.

Reading the flat 22% on a bonus as the tax on it. It is withholding; the tax is your marginal rate. Budgeting from the wrong paycheck: biweekly and semi-monthly differ by about 7.7%. Claiming the same child on two W-4s, which under-withholds the household by the credit. Assuming a raise can push you into a bracket that leaves you worse off — in a progressive system it cannot. Forgetting the Social Security cap: above $184,500 the later paychecks are larger, and a budget built on January's paycheck is too tight for December's.