Your gross pay is the headline number on your offer letter. The amount that actually reaches your bank account — your netor take-home pay — is smaller because several taxes and deductions come out first. Here's what each line on a US pay stub means.
1. Gross pay
This is your total earnings for the pay period before anything is withheld — salary, hourly wages, overtime, and commissions. Everything below is subtracted from it.
2. Federal income tax
Withheld based on your wages, filing status, and the information on your Form W-4. The US uses progressive brackets, so only the income that falls within each bracket is taxed at that rate — your marginal rate (the rate on your last dollar) is higher than your effectiverate (the average across all your income). The standard deduction reduces the amount that's taxable before brackets apply.
3. Social Security & Medicare (FICA)
These are flat payroll taxes. Social Security is 6.2% of wages up to an annual cap (the wage base); above the cap you pay no more for the year. Medicareis 1.45% on all wages with no cap, plus an extra 0.9% on wages above a high threshold. Together they're called FICA.
4. State (and sometimes local) income tax
Depends entirely on where you live. Nine states have no income tax at all; others use a flat rate or progressive brackets. Some cities and counties add a local income tax on top. You can see your state's exact effect on the paycheck calculator for your state.
5. Pre-tax deductions
Contributions to a 401(k), HSA, FSA, or health-insurance premium that come out beforetax — lowering your taxable income (and sometimes your FICA wages too). They reduce your tax, but they're still money leaving your paycheck, so they lower your take-home cash even though they're working for you. We cover the details in pre-tax vs after-tax deductions.
Putting it together
Take-home pay = gross − federal tax − state tax − Social Security − Medicare − pre-tax deductions. The fastest way to see your own numbers is to run them: the free paycheck calculator breaks down every line above for your salary, state, and filing status in real time.