A check stub (also called a pay stub) is a document that provides detailed information about an employee’s earnings, deductions, and net pay. Whether you’re an employee checking your wages or an employer ensuring payroll accuracy, understanding a check stub is essential.
If you’ve ever looked at your paycheck and wondered what all the numbers and sections mean, you’re not alone. This guide will walk you through how to read a check stub step by step, ensuring you understand every part of it.
In this article, we will cover:
✔ What a check stub is and why it’s important
✔ The key sections of a check stub
✔ Common deductions and withholdings
✔ How to verify the accuracy of a check stub
Let’s dive in!
What Is a Check Stub?
A check stub is a document that accompanies a paycheck, outlining details about an employee’s earnings and deductions. If you’re paid via direct deposit, you may receive a digital check stub instead of a printed one.
Why Is a Check Stub Important?
✔ Proof of income – Needed for loans, rental applications, and financial transactions
✔ Tax purposes – Helps employees track earnings and deductions for tax filing
✔ Payroll accuracy – Ensures employees are paid correctly and deductions are accurate
💡 Key takeaway: A check stub provides a clear breakdown of an employee’s pay and deductions, ensuring transparency in payroll.
Key Sections of a Check Stub
A check stub contains several sections, each showing different payroll details. Let’s go through them step by step.
1. Employee Information
This section includes the basic details of the employee:
✔ Employee Name – Full legal name
✔ Employee ID or Social Security Number (SSN) – For payroll tracking
✔ Address – Important for tax and record-keeping
2. Employer Information
✔ Company Name – The name of the employer issuing the paycheck
✔ Company Address – Location for tax and payroll records
3. Pay Period and Pay Date
✔ Pay Period: The start and end dates of the period for which the employee is being paid
✔ Pay Date: The date the employer issued the paycheck
💡 Example:
📅 Pay Period: March 1 – March 15
📅 Pay Date: March 20
Understanding Earnings on a Check Stub
This section outlines how much the employee earned before deductions.
4. Gross Pay
✔ Definition: Total earnings before taxes and deductions
✔ For hourly employees: Hours worked × hourly wage
✔ For salaried employees: Fixed salary amount per pay period
💡 Example:
- Hourly Employee: 40 hours × $20/hour = $800 Gross Pay
- Salaried Employee: Biweekly salary of $3,000 Gross Pay
5. Overtime Pay (If Applicable)
✔ Extra wages for working beyond regular hours (usually 1.5x the hourly wage)
💡 Example:
If an employee earns $20 per hour and works 5 overtime hours:
👉 Overtime Pay = 5 hours × $30 (1.5×$20) = $150
6. Bonuses & Additional Compensation
✔ Any extra income, like commissions, bonuses, or incentives, is listed separately
Understanding Deductions on a Check Stub
Deductions are amounts taken out of the employee’s gross pay for taxes, benefits, and other obligations.
7. Federal & State Taxes
✔ Federal Income Tax – Based on IRS tax brackets
✔ State Income Tax – Varies by state (some states have no income tax)
✔ Local Taxes – If applicable in certain cities/counties
💡 Example: If an employee’s gross pay is $1,000, federal tax might be $150, state tax $50, and local tax $20.
8. Social Security & Medicare (FICA Taxes)
✔ Social Security Tax – 6.2% of wages (up to a certain income limit)
✔ Medicare Tax – 1.45% of wages
💡 Example:
If an employee earns $1,000 gross pay, the deductions are:
- Social Security: $62 (6.2% of $1,000)
- Medicare: $14.50 (1.45% of $1,000)
9. Health Insurance & Retirement Contributions
✔ Health Insurance Premiums – Employer-provided insurance costs deducted from pay
✔ 401(k) or Pension Plan Contributions – Retirement savings taken pre-tax or post-tax
💡 Example: If an employee contributes $50 per paycheck to a 401(k), it will be deducted from their gross pay.
10. Wage Garnishments (If Applicable)
✔ Court-ordered deductions for debts like child support or unpaid loans
Understanding Net Pay on a Check Stub
11. Net Pay (Take-Home Pay)
✔ The final amount the employee receives after all deductions
✔ Formula: Gross Pay – Total Deductions = Net Pay
💡 Example:
📌 Gross Pay: $1,000
📌 Deductions: $276.50 (Taxes + Insurance + 401(k))
📌 Net Pay: $723.50 (Final paycheck amount)
How to Verify the Accuracy of a Check Stub
To ensure your check stub is correct:
✔ Double-check hours worked & pay rate – Ensure your gross pay is correct
✔ Review tax withholdings – Use an online payroll calculator to verify deductions
✔ Compare with previous pay stubs – Look for any unexpected changes
✔ Confirm direct deposit matches net pay – Ensure your paycheck matches the net pay amount
💡 Tip: If you find errors or missing payments, contact your employer or payroll department immediately!
Common Mistakes to Avoid When Reading a Check Stub
❌ Ignoring deductions – Always review how much is taken out of your paycheck
❌ Not keeping records – Save check stubs for tax filing and proof of income
❌ Overlooking errors – Report incorrect wages, tax amounts, or missing deductions
💡 Solution: Always review your check stub carefully and ask your employer for corrections if needed!
Final Thoughts
Understanding how to read a check stub is essential for tracking earnings, verifying tax withholdings, and managing personal finances. By breaking down each section—from gross pay to deductions and net pay—you can ensure payroll accuracy and avoid mistakes.
💡 Key Takeaways:
✅ A check stub provides a detailed breakdown of earnings and deductions
✅ Gross pay is the total salary before deductions
✅ Deductions include taxes, insurance, and retirement contributions
✅ Net pay is the amount you take home after deductions
✅ Always review your check stub for errors and keep copies for records
