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The Pay Stub Meaning: A Guide on Everything You Should Know

The Pay Stub Meaning: A Guide on Everything You Should

The Pay Stub Meaning: A Guide on Everything You Should Know

Payday is always a great day. Your hard work is rewarded with that coveted paycheck. 

Then you open and see it might not be quite as much as you hoped or anticipated. Where has all your money gone?

You pull out your pay stub to take a look. Now to understand the pay stub meaning of all those deductions. 

If you have ever found yourself in this situation, read on to learn about the meaning of all those boxes and numbers on your pay stub. 

What Is A Pay Stub?

Let’s start with the most obvious part of the equation and that is what is a pay stub? Maybe you have never bothered to take a closer look at that slip of paper, instead concentrating on the actual check.

It’s time to take a closer look. The pay stub, also called a paycheck stub or pay slip, is the piece of paper that comes with your check. It outlines what your pay is and what is being subtracted from your pay in the form of deductions. 

Most pay stubs cover the pay period. They will also show the year-to-date deductions. 

What Those Payslip Terms Mean

Many employers will choose to use a computer program that creates a document with all the pay stub information.

If you are an employer looking for an easier way to provide payday information to your employees. Check out 

Let’s take a closer look at the terms and information found on your pay stub. 

Employee And Employer Information

This information covers the basics. 

The employee will have their name, social security number, and address. Many companies have employee ID numbers. This might also be included.

The employer information will include the company name, address, and possible contact information for the human resources department. 

Pay Period

The pay period is a set of dates. It has a start date that indicates the first day you are getting paid in that check. The end date is the last date you are getting paid in the check. 

Every pay period is different depending on how often your company does payroll. It’s common to do bi-weekly pay. 

Gross Pay

Your gross pay is the amount you actually earned. For some people, that is a salary and is the same for each pay period. If you work hourly, then it is the number of hours you worked multiplied by your hourly pay rate.

The gross pay has no deductions subtracted yet, so it is not the amount you actually get when you cash your check.

Net Pay

The net pay is the amount you will get when you cash your check. It is your gross pay with all of your deductions subtracted.  

Tax Withholdings

Tax withholdings are the amount subtracted from your check to pay your taxes. When you get hired, you decide how many dependents you are claiming. This tells the employer how much to deduct based on your tax bracket.

Taxes will be deducted for the federal government and likely state government.  Taxes might also need to be paid for the city in which you work or reside. 

Employee Contributions

Your company might offer a 401K plan for retirement savings. Or you might be part of a government or union pension plan. 

Some employees choose to make charitable donations through their paycheck. 

These are other reasons there might be additional deductions made on top of the taxes already subtracted. 

Other Deductions

Another reason for deductions might be if you have a court-ordered garnishment. The employer is required to abide by the court order and subtract the required amount from your check. 

Many states require you to pay child support directly from your paycheck as well. 


Some businesses or unions allow a set amount of vacation and sick time to their employees. Often, your pay stub will show how much vacation/sick time you have used and how much is still available. 

Understanding Your Pay Stub Meaning

It’s your money and you should know where it’s going.

Next time you get paid, pull out that pay stub and take a closer look. Make sure you know the pay stub meaning for all the reasons your employer is deducting from your earnings. 

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