How to Read a Pay Stub: Every Line Explained
A teen works 20 hours at $15 an hour, does the math, and expects $300. The deposit comes in lower. Nothing went wrong. The pay stub shows exactly where every dollar went, and learning how to read a pay stub takes about ten minutes.
To read a pay stub, start with gross pay, which is everything you earned before anything is taken out. Then read each deduction line: federal income tax, Social Security, Medicare, state and local tax, and any benefits you signed up for. What's left is net pay, the amount that lands in your account. Year-to-date columns show running totals for the year.
This guide walks through every line, then covers the part most pay stub guides skip: why a Maryland pay stub looks different.
Key Takeaways
Gross pay is what you earned, and net pay is what you keep. Every line on a pay stub between those two numbers is a deduction.
Employees pay 6.2% of wages for Social Security and 1.45% for Medicare, according to the IRS, and together those two taxes are often the biggest deduction on a teen's first pay stub.
Every Maryland county and Baltimore City charges a local income tax, and the rate is based on where you live, not where you work.
On many Maryland pay stubs, state and county income tax appear together as one "State Tax" line, so there is no separate county line to find.
Maryland law requires every pay stub to show hours worked, pay rate, gross and net pay, and the name and amount of every deduction.
What Is a Pay Stub?
A pay stub is the written record of how your pay was calculated for one pay period. A pay stub lists what you earned, what was taken out, and what you actually received. You get one every payday, whether you're paid by paper check or direct deposit, and many employers post it in an online payroll portal instead of printing it.
A pay stub isn't the same thing as a paycheck. The paycheck or direct deposit is the money. The pay stub is the explanation.
In Maryland, the pay stub isn't optional. Under Maryland Labor and Employment Code § 3-504, employers must give each employee a written statement every pay period, on paper or online, that includes:
The employer's registered name, address, and phone number
The pay date and the start and end dates of the pay period
Hours worked, for employees who are eligible for overtime
Rates of pay
Gross pay and net pay
The name and amount of every deduction
Extra pay such as bonuses or commissions
That list doubles as a checklist. If your pay stub is missing one of those items, ask your employer about it.
How to Read a Pay Stub, Line by Line
Every pay stub has the same five parts, whatever payroll company prints it: a header with your details and pay period, an earnings section, a deductions section, net pay, and year-to-date totals. Once you can find those five parts, you can read any pay stub, from a first summer job to a full-time salary.
Header: Name, Pay Period, and Pay Date
The header shows your name, employee ID, and your employer's details. The header also shows two dates people mix up. The pay period is the stretch of days you worked. The pay date is the day you get paid, often a week or more later.
Earnings: Rate, Hours, and Gross Pay
The earnings section shows your hourly rate, the hours you worked, and any overtime, tips, or bonuses. Multiply rate by hours and you should get gross pay.
Check the hours against your own record. A missing shift is one of the most common pay stub errors, and it's easiest to fix right away.
Deductions: Taxes and Benefits
The deductions section lists everything taken out of gross pay. Some pay stub deductions are required by law, like income tax and Social Security. Others are ones you chose, like a retirement contribution. The sections below break down each one.
Net Pay: What Actually Hits Your Account
Net pay is gross pay minus every deduction. Net pay is the number that lands in your bank account, and it's the number you should budget with.
What Does YTD Mean on a Pay Stub?
YTD stands for year to date. The YTD column on a pay stub adds up your earnings and deductions from January 1 through the current paycheck. At the end of the year, your YTD totals should match the W-2 your employer sends you for filing taxes.
What Is the Difference Between Gross Pay and Net Pay?
Gross pay is the total you earned before anything is taken out. Net pay is what's left after taxes and other deductions, the amount you actually receive. The formula is simple: gross pay minus taxes minus other deductions equals net pay. The gap between gross pay and net pay surprises almost everyone on their first paycheck.
Here's an illustrative example. The federal and Maryland tax amounts are round numbers made up for teaching, not calculated from a tax table.
Pay stub line | Amount |
Gross pay (20 hours at $15) | $300.00 |
Social Security (6.2%) | minus $18.60 |
Medicare (1.45%) | minus $4.35 |
Federal income tax (example amount) | minus $6.00 |
Maryland state and county tax (example amount) | minus $12.00 |
Net pay | $259.05 |
The Social Security and Medicare lines are the only ones you can calculate yourself with confidence, because those rates are flat. The income tax lines depend on your W-4, your Maryland MW507, and how much you earn over the year.
Every Pay Stub Deduction, Explained
Most pay stub deductions fall into four groups: federal income tax, Social Security and Medicare (together called FICA), state and local income tax, and benefit deductions like health insurance or retirement. The first three are taxes your employer must withhold. The fourth depends on what you signed up for.
Federal Income Tax and Your W-4
Federal income tax withholding is usually labeled FIT or FWT on a pay stub. The amount depends on the Form W-4 you filled out when you were hired.
For a lot of teens, the W-4 is the first government form they ever complete, and that form controls this line on every pay stub that follows. If you earn a small amount, federal income tax withholding may be low or even zero.
Social Security and Medicare (FICA)
FICA stands for the Federal Insurance Contributions Act, the law behind two separate payroll taxes. According to IRS Tax Topic 751, employees pay 6.2% of wages for Social Security and 1.45% for Medicare, and employers match both amounts.
Social Security funds retirement and disability benefits. Medicare helps pay for health care for people 65 and older.
On a pay stub, Social Security may show up as FICA-SS, SS, or OASDI (old-age, survivors, and disability insurance). Medicare usually shows up as FICA-MED or MED. Both rates are set in federal law and rarely change, but the IRS page is the place to confirm them.
State and Local Income Tax
Most states withhold state income tax, usually labeled SIT or SWT. Some cities and counties add a local income tax on top. Maryland is unusual because every resident pays a Maryland local income tax, which is why the next section exists.
Pre-Tax and After-Tax Deductions
Benefit deductions come out either before taxes are figured (pre-tax) or after (post-tax). A 401(k) contribution or a health insurance premium is often pre-tax, which lowers the income your taxes are calculated on. Most teens in a first part-time job won't see these deductions yet, but they're worth recognizing for later.
How Maryland Pay Stubs Are Different
Maryland pay stubs carry a local income tax that most states don't have. Every one of Maryland's 23 counties and Baltimore City charges a Maryland local income tax, and it's based on where you live, not where you work. On many Maryland pay stubs, that county tax is folded into the state tax line instead of appearing on its own.
Here's what that means in practice:
Your home county sets the rate. A teen who lives in Anne Arundel County and works in Howard County pays Anne Arundel County's local rate.
You may not see a county line at all. The Comptroller of Maryland's Central Payroll Bureau states that combined state and local withholding appears under the single heading "STATE TAX" on state payroll pay stubs, with a County Code box showing which county is on file, per its annual withholding memo. Many private payroll systems combine the two the same way, and some list the county separately. Both are normal.
Form MW507 tells your employer your county. The MW507 is Maryland's version of the W-4. If you never turn one in, the Comptroller says withholding defaults to the highest local rate.
Moved? Update the form. If you move to a new county, file a new MW507 so the right county rate is applied.
Military spouses have one more option. A civilian spouse who qualifies under the Military Spouses Residency Relief Act can claim an exemption from Maryland withholding by filing Form MW507M along with the MW507. D2D covers more of what changes for families after a move in financial literacy for military kids.
County rates can change from year to year, so this guide doesn't list them. The Comptroller of Maryland publishes current county rates each year.
Common Pay Stub Abbreviations
Pay stub abbreviations are shorthand that payroll systems use to fit every line on one page. The labels vary a little by employer, but the same dozen or so show up on almost every pay stub. This table covers the pay stub abbreviations you're most likely to see.
Abbreviation | What it means |
GROSS | Total pay before deductions |
NET | Take-home pay after deductions |
FIT or FWT | Federal income tax withheld |
SIT or SWT | State income tax withheld (in Maryland, often includes county tax) |
FICA-SS or OASDI | Social Security tax |
FICA-MED or MED | Medicare tax |
YTD | Year to date, the running total since January 1 |
OT | Overtime hours or pay |
PTO | Paid time off |
401K or 403B | Retirement plan contribution |
PRE-TAX or POST-TAX | Deductions taken before or after taxes are figured |
If you see an abbreviation that isn't here, ask payroll. It's a normal question, and payroll staff answer it all the time.
How to Check Your Pay Stub for Mistakes
Check every pay stub against five things: your hours, your pay rate, the pay period dates, your tax setup, and any overtime. Payroll mistakes happen, and they're far easier to fix on the next paycheck than months later at tax time. Keep your own log of hours worked so you have something to compare against.
Hours match your own record.
Pay rate matches what you were told when you were hired. Maryland employers must give written notice of your rate of pay at hiring, under the same § 3-504.
Pay period dates match the days you actually worked.
Tax setup is right, including your filing status and your county.
Overtime is paid at the correct rate.
If something is off, compare the pay stub to your last one, then contact payroll or HR with the specific line and amount. Follow up until the correction shows on a pay stub.
Teaching Teens to Read Their First Pay Stub
The fastest way to teach a teen how to read a pay stub is to sit down with a real one for ten minutes. Find gross pay first. Find the Social Security and Medicare lines next. Then find net pay and ask whether it matches what they expected. Walking through one pay stub makes every pay stub after it readable.
Diapers 2 Deposits builds this into its programs. The Game of Life financial literacy simulation starts every participant at a Payday station before they budget a dollar, and D2D has run it for 166 Baltimore YouthWorks participants across six city sites.
For teens in paid summer programs like YouthWorks, the lesson and the first real pay stub often arrive within the same few weeks. That timing is the point. A pay stub makes more sense when it's your own money on the page.
Pay Stub FAQ
Why is my first paycheck smaller than I expected?
Your first paycheck is smaller because taxes come out before you're paid. Social Security and Medicare alone take 7.65% of gross pay, and federal, state, and local income tax come out too. A first paycheck may also cover only part of a pay period.
Do teens pay Social Security and Medicare taxes?
Yes, in almost every job. The main exception, per the IRS guidance on family employees, is a child under 18 working for a parent's sole proprietorship or a partnership in which each partner is a parent of the child. Those wages aren't subject to Social Security and Medicare taxes, though income tax withholding still applies.
Why does my Maryland pay stub show only one state tax line?
Many Maryland payroll systems combine state and county income tax into a single state tax line. The county portion is still there, folded in. Your county comes from the address on your MW507.
How long should I keep my pay stubs?
Keep each pay stub at least until you receive your W-2 and confirm it matches your final YTD totals. Keeping a full year of pay stubs also helps when you need proof of income for an apartment or a loan.
What does YTD mean on a pay stub?
YTD means year to date. On a pay stub, YTD is the running total of your earnings and deductions from January 1 through the current pay period.
What to Do Next
Read your next pay stub instead of glancing at the deposit. Start with gross pay, work down through each deduction, and end at net pay, the number you actually budget with. If you live in Maryland, remember the county tax may be sitting inside the state tax line.
Knowing how to read a pay stub is the first step. What you do with net pay is the next one. D2D offers financial literacy classes for students, and the D2D Youth Money Hub gives young people ongoing support with budgeting, credit, and the money decisions that come after the first job.
This article is general financial education, not tax advice. For your specific situation, talk with a tax professional.
Whitney Ramirez is an Accredited Financial Counselor (AFC) and the Founder and CEO of Diapers 2 Deposits, Inc.
