How to read your paycheck (gross, net, deductions)
What every line on a US paycheck means, and which ones you can actually change.
Theo Russell
February 22, 2026
The big two: gross and net
Gross pay: total before any deductions. The number on your job offer.
Net pay: what hits your bank account. What you actually have to spend or save.
Common deductions
Federal income tax: based on income and filing status. Varies; check via the IRS withholding calculator if it seems off.
Social Security (6.2%) and Medicare (1.45%): mandatory, always exactly these rates on the first $168,600 (2025).
State income tax: varies by state. Some states (TX, FL, WA) have no state income tax.
401(k), health insurance, HSA: optional pre-tax deductions. These reduce your taxable income.
Which ones you can change
Federal withholding via Form W-4 — adjust if you're getting huge refunds (means too much withheld) or owing money in April.
401(k) contribution: adjust through your employer's portal. Increases mean smaller paychecks but more tax-deferred saving.
Health/dental: usually only at open enrollment unless you have a 'qualifying life event'.
People also ask
Why was my first paycheck smaller than expected?+
Often partial pay period, or wrong tax withholding default. Should normalize by paycheck 2.
What's the difference between W-2 and W-4?+
W-4: you fill out for the employer to set withholding. W-2: employer sends you in January summarizing the year.
Should I adjust my W-4?+
If your refund is over $2,000 or you owe over $1,000, yes — you're losing the use of your money to bad withholding.