Field-by-Field Guide
How to Read a Pay Stub
A pay stub is the per-paycheck statement of what you earned and where it went — the bridge between your gross pay and the smaller number that lands in your bank account. Lenders, landlords, and HR teams read pay stubs constantly, because they are the freshest evidence of income a person has.
Formats vary wildly across payroll providers, but every stub answers the same five questions: who paid whom, for what period, what was earned, what was taken out, and what is left. Nearly all stubs also carry year-to-date (YTD) columns beside the current-period numbers.
Every section of a pay stub, explained
Employer and employee blocks
The company's legal name and address, and your name, address, and usually an employee ID. Staffing agencies show the agency, not the worksite.
Pay period vs pay date
The pay period is the span of work being paid for; the pay date is when the money is issued. For income verification, the pay period defines the frequency — weekly, bi-weekly, semi-monthly, or monthly.
Rate and hours
For hourly workers: base rate, regular hours, overtime hours (typically at 1.5×), and any shift differentials. Salaried stubs show the per-period salary instead.
Gross pay
Total earnings before anything is withheld: base pay plus overtime, bonuses, commissions, and taxable benefits. This is the starting number for annualizing income.
Pre-tax deductions
Items taken out before taxes are computed: traditional 401(k) contributions, pre-tax health/dental/vision premiums, HSA and FSA contributions, commuter benefits. These explain why taxable wages are lower than gross.
Taxes withheld
Federal income tax, Social Security (6.2%), Medicare (1.45%), and state/local income taxes where applicable. Social Security and Medicare are often labeled FICA, OASDI, or MED.
Post-tax deductions
Taken out after taxes: Roth 401(k) contributions, wage garnishments, union dues, charitable deductions, and some insurance types.
Net pay
What actually gets deposited: gross pay minus all deductions and taxes. Sometimes labeled take-home pay.
YTD columns
Year-to-date totals for every line — earnings, each deduction, each tax. YTD gross divided by the fraction of the year elapsed is the standard income-annualization check.
PTO and leave balances
Many stubs show accrued and used vacation/sick time. Useful context, not income.
How to read a pay stub, step by step
- 1
Establish the pay frequency
From the pay period dates, determine weekly / bi-weekly / semi-monthly / monthly — it changes every annualization calculation (52, 26, 24, or 12 periods per year).
- 2
Read gross, then follow the subtractions
Start at gross pay and walk down: pre-tax deductions, taxes, post-tax deductions, ending at net pay. The math should tie out exactly.
- 3
Cross-check with YTD
Current-period gross times the number of periods elapsed should be near YTD gross — big gaps mean bonuses, raises, unpaid leave, or a mid-year start.
- 4
Annualize the income
For steady earners: gross per period × periods per year. For variable earners: YTD gross ÷ elapsed periods × total periods gives a fairer figure.
Red flags worth a second look
- ⚠Gross minus deductions not equaling net — arithmetic on a stub should tie out to the penny.
- ⚠YTD figures lower than a previous stub's YTD, or that reset mid-year without a job change.
- ⚠Missing or round-number FICA withholding — Social Security and Medicare percentages are fixed and easy to verify.
- ⚠Pay periods that overlap or leave gaps across consecutive stubs.
- ⚠Fonts, alignment, or math inconsistencies that suggest an edited document — verification workflows should corroborate with a second source.
What PayStub Parser extracts automatically
Once you know how to read a pay stub, you also know how tedious it is to copy the values out by hand. PayStub Parser extracts these fields as structured data in seconds:
- ✓Employee & employer name
- ✓Pay period dates
- ✓Gross pay
- ✓Net pay
- ✓Federal & state tax withheld
- ✓FICA (Social Security & Medicare)
- ✓YTD totals
FAQ
How do I calculate annual income from a pay stub?
Multiply gross pay per period by the number of periods in a year (52 weekly, 26 bi-weekly, 24 semi-monthly, 12 monthly), or divide YTD gross by elapsed periods and scale to a full year for variable earners.
What is the difference between gross and net pay?
Gross is everything earned in the period; net is what remains after pre-tax deductions, taxes, and post-tax deductions. Income verification is almost always done on gross.
What does FICA or OASDI mean on my stub?
FICA covers Social Security and Medicare taxes. OASDI (Old-Age, Survivors, and Disability Insurance) is the Social Security portion at 6.2%; Medicare is the 1.45% line, sometimes labeled MED.
Why is my taxable pay lower than my gross pay?
Pre-tax deductions — traditional 401(k), pre-tax health premiums, HSA/FSA — reduce the wages that income tax is calculated on, so taxable wages run below gross.
Can I extract pay stub data automatically?
Yes — upload a stub from any payroll provider and the parser returns employer, employee, pay period, gross, net, deductions, and YTD totals as structured data with confidence scores.