The gap between your salary and what actually lands in your bank account can be surprisingly wide, and a pay stub packed with abbreviations doesn't make it easier to see why. Here's what each major deduction is actually doing.
Federal income tax withholding
This is an estimate, not a final bill — your employer withholds an approximate amount each pay period based on the information you gave them on Form W-4 (filing status, dependents, any additional withholding you requested), and the real number gets settled up when you file your tax return. Withhold too little all year and you'll owe at tax time; withhold too much and you'll get a refund, which is really just money you loaned the government interest-free.
FICA: Social Security and Medicare
Unlike federal income tax, FICA is a flat percentage, not a bracket system. Social Security tax is 6.2% of your wages, but only up to an annual cap (the "wage base," which is $184,500 for 2026) — earn more than that and the withholding stops for the rest of the year. Medicare tax is 1.45% with no cap, plus an extra 0.9% on income above $200,000 (single) or $250,000 (married filing jointly). Your employer matches the base 6.2% and 1.45% on their own side, though you never see that half on your stub.
Pre-tax vs. post-tax deductions
This distinction matters more than it looks. A pre-tax deduction — a traditional 401(k) contribution, many health insurance premiums, an HSA contribution — comes out of your pay before federal income tax is calculated, which lowers your taxable income for the year. A post-tax deduction (a Roth 401(k) contribution, for example) comes out after taxes are already calculated. Both reduce your take-home pay by the same dollar amount, but only the pre-tax version reduces what you owe in income tax right now — which is exactly why increasing a traditional 401(k) contribution often costs you less in actual take-home pay than the contribution amount would suggest.
State and local tax
This is the piece that varies the most person to person: some states have no income tax at all, others have a flat rate, and others use their own bracket system layered on top of the federal one. A few cities add their own local income tax on top of that. There's no single number that applies to everyone, which is why our paycheck calculator asks you to enter your own estimated state/local rate rather than guessing for you.
Reading it all together
A useful mental model: start with gross pay, subtract pre-tax deductions to get your taxable wages, calculate federal and state tax on that reduced number, then separately subtract FICA (which is calculated on gross wages, not the reduced taxable amount) and any post-tax deductions. What's left is your net, take-home pay — the number that actually hits your bank account.
Common W-4 mistakes
The W-4 you filled out on day one isn't set in stone — and it's worth revisiting after any major life change. A few common missteps: forgetting to update it after getting married or divorced, not accounting for a second job or a spouse's income (which can lead to under-withholding across both), and leaving it unchanged for years after a raise, which doesn't cause a problem by itself but is a good prompt to double check the numbers still make sense. Most payroll systems let you submit a new W-4 at any time, and it takes effect within a pay period or two.
Why your first paycheck sometimes looks different
A first paycheck at a new job can look smaller than expected for reasons that have nothing to do with taxes: some employers start new hires on a partial pay period, benefits elections (health insurance, retirement contributions) sometimes don't kick in until a waiting period ends, and a first paycheck occasionally arrives before certain deductions are fully set up in the system, which can make a later paycheck look like it dropped even though nothing actually changed about your pay.