How to Read Your Paycheck Stub

If you are like most people, your paycheck means only one thing–money in the bank! But if you find yourself living paycheck to paycheck and need to improve your money management skills, you need to pay close attention to the other perforated portion of your paycheck, called the paycheck stub (also known as the explanation statement.) Educating yourself on how to read your pay stub and understanding the information it contains can play a vitally important role in effective money management and proper budgeting. Knowing where your money is going can help you stay on top of your finances and make the most of your hard-earned paycheck. Our free credit counseling service  can help you develop a solid budget and plan for achieving your financial goals.

What is Included on a Paycheck Stub?

Although every company prints paychecks that are unique in their own way, there are some aspects of the employee paycheck that employers must include by law. Some paycheck stubs can be extremely detailed including such items as retirement plan contributions or accrued vacation time, and others will only detail the required information. The following items will appear on every paycheck stub, and consumers need to fully comprehend their definitions and value:

  • Gross Pay: Includes the total amount of income that you earned during a particular pay period. A pay period is determined by your employer, but is typically weekly, bi-weekly (every two weeks), semi-monthly (twice per month), or monthly. This figure does not factor in tax withholdings.
  • Net Pay: Includes the amount of income that you actually take home after all withholdings have been applied. It is the amount of money that you take straight to the bank!
  • Federal Tax Amount: When you were first hired by your employer, you were required to fill out a W-4 form. This form covers any tax that you may owe to the Federal government come tax time. It is deducted incrementally from each paycheck and can vary depending on the number of exemptions you chose to claim.
  • State Tax: Depending on your state of residence, you may or may not be required to pay a state tax. Most states however, do participate, so this amount is deducted from your paycheck (the same way as Federal tax) to cover the amount of tax that you may owe to the state when your tax return is filed.
  • Local Tax: Although rare, a local tax is sometimes applied to employees of certain cities, counties or school districts. For example, if you live in New Jersey, but work in New York City, you will be required to pay not only New Jersey state tax, but also New York City tax on your earnings.
  • Social Security: The Federal government requires every employee to have a certain percentage of their paycheck withheld for social security purposes. This entitles you to receive a monthly social security payment upon retirement. For wages paid in 2018, employees and employers pay 6.2 percent in OASDI taxes. Thus, an individual with wages equal to or larger than $128,400 would contribute $7,960.80 to the OASDI program in 2018, as would his or her employer.
  • Medicare: Like Social Security withholdings, Medicare withholdings are also mandatory. Every employee pays 1.45% of their paycheck toward Medicare, and every employer contributes an additional 1.45% on behalf of the employee. Upon eligibility for Social Security, an employee is entitled to coverage for a majority of their medical expenses.
  • Year-to-date (for pay and deductions): The year-to-date fields on your paycheck stub show how much you have paid toward a particular withholding at any point in the calendar year. This can be useful when budgeting for monthly expenses or long-term goals.

Additional Items that May Appear on Your Paycheck Stub

Although not required, the following are items that may appear on your paycheck stub and are useful to money management and relevant to your employment status.

  • Insurance Deductions: Monthly payments for such types of insurance as health (medical and dental), and life insurance.
  • Retirement Plan Contributions: Plans such as 401(K) or 403(B) retirement savings plans.
  • Leave Time: Including vacation hours or sick hours. Most employers will detail how many hours have been used to date and how many hours are remaining for the calendar year.
  • Childcare Assistance: If offered by your employer, this amount may appear on each paycheck as a pre-tax benefit.
  • Important Notices: Employers often use a portion of the paycheck stub to communicate important pieces of information to their employees such as wage increases or notifications about tax filings.

Common Abbreviations Used on Paycheck Stubs

  • YTD: Year-to-Date
  • FT or FWT: Federal Tax or Federal Tax Withheld
  • ST or SWT: State Tax or State Tax Withheld
  • SS or SSWT: Social Security or Social Security Tax Withheld
  • MWT or Med: Medicare Tax Withheld

Exercise Good Money Management Skills: Be Proactive

If you need further explanation on how to read your paycheck stub or if a particular calculation doesn’t seem correct, consult your Human Resources Department for assistance. Don’t procrastinate! Exercise good money management skills by being proactive. If a calculation is incorrect, the issue may reappear on every paycheck. Also, you may not be making the best choice for a retirement plan contribution, or losing money if your earnings are not calculated properly. It is ultimately your responsibility to ensure that you are being properly compensated.

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If you are struggling with debt or have any other financial concerns, Clearpoint is here to help. Get started today with a free counseling session! A credit counselor will be happy to speak with you and can help identify the options you have available.

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30 responses to “How to Read Your Paycheck Stub”

  • Israel

    What does M&B PENALTY mean on my check stub

  • What does cres 5% 14 mean ?

    • cers? Spell check

      • Emilie Burke

        Hi Tish! In most cases “CERS” on your paystub stands for “County Employee Retirement System.” I’d suggest confirming with your Human Resources and/or Benefits department!

  • wendra kinsler

    What does isccu mean on a pay stub

  • Brandonsmith

    On valuing and who it belongs to. There is individual letters after where the value is written. What are the letters M W J C mean?? Thank you

    • Emilie Burke

      Hi Brandon! Without more detail, I can’t be sure, but I’d suggest reaching out to your human resources department for clarification on your paycheck stub.

  • Raymond

    What is a jvc deduction

    • Emilie Burke

      Hi Raymond! Without additional details, I can’t be sure, but I’d suggest getting in touch with human resources or your benefits department to understand your paycheck.

  • c. franciosi

    how can I tell if my paycheck stubs have been altered? payroll and HR are the same person. I am being shorted on net pay, and I am now wondering @ my YTD(s).

    • Emilie Burke

      Hi C! Is your gross pay correct? If so, the difference between your gross and net pay is going towards withholdings and taxes. If you’ve overpaid, you’ll likely get a large tax refund. Hope that helps!

  • What is a G506 deduction?

  • Does anyone know wat PBON Otr mean


    What does advemp deduction mean on my pay stub thanks

  • What do SMCU3 mean on my pay stub

  • What does ee2500 mean on my pay check stub

  • Ray Sawyer

    I have a bunch of deductions on my paystub. WC under something called Fringe, FUTA_E, FHW, MED, MED_E, SOC ,SOC_E, ARSUI_E, ARSWH

  • What does ecss means on a paycheck stub?

    • Thomas Nitzsche

      Hi Meghan, I don’t recognize that abbreviation and Google isn’t providing a good answer, so I would check with your payroll administrator at work.

      • What does Ck 945488 mean on a check stub

        • Emilie Burke

          Usually ‘Ck’ means Check, so that may be the check number. I’d suggest reaching out to you human resources or benefits department for clarity!

  • don soucy

    what does ind46r mean on my indiana check stub???

  • Kathleen Paulauskas

    What does SMCU 3 MEAN on your paystub.

  • kaia forbes


  • Jose Manuel Caratachea

    I have a question.On my check stub their is a 4 digit code or something that is deducting from me.the code is u know what that code is.again G505 is deducting money from my wages.dont know what it is can u help me out

  • Michael Koester

    What’s MDCOE mean on my pay stub? It’s a 10% deduction.

    • Thomas Bright

      Michael, I’m not sure but posting your comment in case someone can weigh in with the answer.

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