What Deductions Come Out of My Paycheck? Every Line on Your Pay Stub Explained

Why your take-home pay feels so much lower than your salary

Opening your first pay stub is one of those financial wake-up calls nobody warns you about. You accepted a $55,000 salary expecting roughly $2,115 every two weeks. Instead, you see $1,560 deposited. Where did $555 go?

It went to about a dozen different line items, each taking a slice. Some are required by law. Some you chose during benefits enrollment and may not fully remember. And a few might be employer-specific deductions you didn't even know existed. Understanding each one puts you back in control — and reveals places where you might be able to adjust.

Let's walk through every category, starting with the ones you can't avoid.

Mandatory deductions: the ones you can't change

Federal income tax

This is usually the largest single deduction on your paycheck. The amount depends on your taxable income and the withholding instructions on your W-4 form. The US uses a progressive tax system — not all your income is taxed at the same rate.

For 2026, the brackets for single filers look like this: 10% on the first $12,400, 12% on $12,401–$50,400, 22% on $50,401–$105,700, and so on up to 37% for income above $640,600. Most workers fall in the 12% or 22% bracket. Our federal tax brackets guide breaks this down with practical examples.

One important point: the amount withheld per paycheck is an estimate of what you'll owe for the year. If it's too high, you get a refund. Too low, and you owe money in April. Your W-4 form controls this estimate, and updating it after major life changes (marriage, new child, second job) keeps your withholding accurate.

Social Security tax (OASDI)

You'll see this listed as "Social Security," "OASDI," or "SS" on your pay stub. The rate is 6.2% of your gross pay, up to a wage cap of $184,500 for 2026. Once your year-to-date earnings hit that cap, Social Security deductions stop for the rest of the year.

Your employer pays a matching 6.2%, so the total contribution toward your Social Security account is 12.4%. This funds your future retirement benefits based on your Social Security earnings record.

Medicare tax

Medicare takes 1.45% of your gross pay with no income cap. Unlike Social Security, this deduction never stops regardless of how much you earn. There's an additional 0.9% Medicare surtax for individual earnings above $200,000, bringing the total to 2.35% on high income.

Combined, Social Security and Medicare (together called FICA) take 7.65% of every paycheck. On a biweekly gross pay of $2,308 ($60k salary), that's about $176 per paycheck — and it's the same whether you're 22 or 62.

State and local income tax

This one varies enormously. Nine states have no income tax at all: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. Others range from flat rates around 3% (Pennsylvania) to progressive rates up to 13.3% (California's top bracket).

Some cities layer additional local income taxes on top. New York City, for example, adds up to 3.876%. If you live in one state and work in another, reciprocity agreements determine which state's tax applies — but not all states have these agreements, which can create complications.

Voluntary deductions: the ones you chose (or forgot you chose)

Health insurance premiums

If you're on an employer-sponsored health plan, your share of the premium is usually deducted pre-tax. Depending on the plan level (single vs. family) and the employer's contribution, this could range from $50 to $600 per paycheck.

Many people enroll during onboarding and don't revisit their choice during open enrollment. If your health situation has changed — maybe you no longer need family coverage, or a spouse's plan is cheaper — switching plans can meaningfully increase your take-home pay.

401(k) or retirement contributions

Traditional 401(k) contributions are pre-tax, meaning they reduce your taxable income. Contributing 6% of a $60,000 salary saves you roughly $138 per biweekly paycheck — but your take-home drops by only about $105 because of the tax savings. That's essentially getting a discount on saving for retirement.

Roth 401(k) contributions, on the other hand, are post-tax. Your take-home pay drops by the full contribution amount, but you won't owe taxes on withdrawals in retirement. The right choice depends on whether you expect to be in a higher or lower tax bracket when you retire.

If your employer matches contributions, make sure you're contributing at least enough to capture the full match. An employer matching 50% of your contributions up to 6% of salary is essentially giving you a 3% raise that disappears if you don't participate.

Health Savings Account (HSA)

Available only if you're enrolled in a high-deductible health plan (HDHP), HSA contributions are triple-tax-advantaged: deducted pre-tax, grow tax-free, and can be withdrawn tax-free for medical expenses. In 2026, the contribution limit is $4,400 for individuals and $8,750 for families.

An HSA is one of the most powerful tax tools available to employees. If you can afford to pay current medical expenses out of pocket and let the HSA grow, it functions as a supplemental retirement account with more flexibility than a 401(k).

Other common voluntary deductions

• Dental and vision insurance — typically $10-$50 per paycheck
• Life insurance — employer-provided basic coverage is often free; supplemental coverage is an additional payroll deduction
• Disability insurance — short-term and long-term coverage, usually $20-$80 per paycheck
• Flexible Spending Account (FSA) — pre-tax money for medical or dependent care expenses, use-it-or-lose-it with limited rollover
• Commuter benefits — pre-tax transit and parking deductions
• Union dues — if applicable, typically a percentage of pay

How to read your pay stub and spot errors

Payroll errors happen more often than people assume. A 2023 IRS compliance study found that about one-third of employers make payroll errors in any given year. Here's how to check yours:

Verify gross pay first. If you're salaried, divide your annual salary by the number of pay periods (26 for biweekly, 24 for semi-monthly). If you're hourly, multiply your rate by hours worked, including any overtime at 1.5x. Our overtime pay guide explains how overtime calculations should work.

Check year-to-date totals. Make sure the running totals on your stub match what you'd expect based on the number of pay periods so far. A sudden jump or drop in YTD figures can indicate a processing error.

Look at deduction consistency. Unless you changed your W-4, switched benefits, or got a raise, most deductions should be identical from paycheck to paycheck. If a number changes unexpectedly, ask HR for an explanation.

Confirm 401(k) matching. If your employer matches contributions, verify that the match amount appears on your stub and matches the stated formula. Employer matches don't always start immediately — some have a waiting period or vesting schedule.

Can you adjust your deductions to take home more?

Yes, within limits. Here are legitimate ways to increase your take-home pay:

Update your W-4. If you consistently get large tax refunds (over $500), your withholding is higher than necessary. Adjusting your W-4 — by updating your dependents, additional income, or extra withholding fields — puts that money in your paycheck throughout the year instead of giving the government an interest-free loan.

Review benefits during open enrollment. Don't auto-renew every year. Check if a different health plan tier, a spousal plan, or an HSA-eligible plan better fits your current situation. The right switch can save $100+ per paycheck.

Maximize pre-tax benefits. Contributing to an FSA for known medical expenses or using commuter benefits reduces taxable income. A $200/month transit pass paid pre-tax saves you about $50-$70/month in taxes compared to paying post-tax.

Just don't reduce 401(k) contributions below your employer match threshold. That's leaving free money on the table, which is worse than any take-home pay increase.