You earned $650. So why did $597 show up?
The story so far Your campus job pays $16.25 an hour, and you work 20 hours a week. Your first paycheck covers two weeks: 40 hours. You did the math and expected $650. Then direct deposit dropped $597.19 into your Riverbend checking. The missing $52.81 is explained on a piece of paper most people never read: your pay stub.
A pay stub lists what you earned, every amount taken out, and what's left for you.
Payroll mistakes happen. If you can read your stub, you can catch missing hours or a wrong rate, and you'll know what you can really spend.
Start at the top with hours × rate, subtract each tax line, and check that what's left matches your deposit.
Payroll specialists run paychecks. HR generalists answer pay questions. Tax accountants know every line by heart.
What you're looking at: a sketch of your first pay stub. The amount at the top is what you earned. The red lines are taken out. The green box is what lands in your account.
A pay stub reads top to bottom.
Every stub has the same three parts: what you earned, what was taken out, and what's left. Here's each line of yours, with its real number.
Part 1: what you earned
Your gross pay is what you earned before anything comes out. For an hourly job, it's the hours you worked times your rate, the dollars you earn per hour. The pay period is the stretch of days the check covers. Paid every other week means 26 paychecks a year.
- Pay period
- Two weeks, at 20 hours a week: 40 hours. Every other Friday, so 26 paychecks a year.
- Gross pay
- 40 hours × $16.25 = $650.00.
Part 2: what was taken out
Your employer takes taxes out before paying you and sends them to the government for you. That's called withholding. Three lines show up on almost every U.S. stub.
Federal income tax pays for the U.S. government. Your employer guesses how much you'll owe for the whole year and takes a slice from each check. The first part of everyone's yearly income isn't taxed at all: that untaxed part is the standard deduction, $16,100 in 2026. Only what you earn above it is taxed, starting at 10%.
- Your year
- If every check is $650: $650 × 26 = $16,900 a year.
- Standard deduction
- $16,900 − $16,100 untaxed = only $800 is taxed.
- Federal income tax
- 10% × $800 = $80 for the year. Split over 26 checks: $8026 = $3.08 a paycheck.
The other two lines together are called FICA. Social Security tax is 6.2% of your gross pay, and it funds monthly checks for retirees and people who can't work. Medicare tax is 1.45% and funds health care for people 65 and older. Unlike income tax, FICA has no untaxed starting amount: it starts with your very first dollar. Your employer pays a matching 7.65% on top, which never shows up as money taken from you.
- Social Security
- 6.2% × $650 = $40.30.
- Medicare
- 1.45% × $650 = $9.43.
- FICA
- $40.30 + $9.43 = $49.73, which is 7.65% of $650. Your employer adds another $49.73 you never see.
State income tax is a fourth line in most states. In this example you live in a state with no income tax on wages, like Texas or Florida, so it's $0. Nine states work that way.
Part 3: what's left
Your net pay, or take-home pay, is gross pay minus every amount taken out. It's the number that lands in your account, and the one to budget with. Next to each line, most stubs also show YTD, short for year to date: the total so far this year.
- Net pay
- $650.00 − $3.08 − $40.30 − $9.43 = $597.19. That's the deposit you saw.
- YTD
- On your 5th paycheck of the year, YTD gross pay is 5 × $650 = $3,250.
What you're looking at: a pay stub calculator for a single person paid every other week, using 2026 federal rules: the $16,100 standard deduction, 10% and 12% tax brackets, Social Security 6.2% and Medicare 1.45%. Federal tax follows a simplified version of the IRS method. State tax is $0, as in this example. The bar shows how your gross pay splits.
Money taken out before tax
Some jobs let you save for retirement in a 401(k) straight from your paycheck. That's a pre-tax deduction: it comes out before federal income tax is figured, so you're taxed on less. FICA still applies to it. Try the 5% button above.
- Pre-tax deduction
- Save 5% of $650 = $32.50 in a 401(k). Income tax is figured on $650 − $32.50 = $617.50 a check, or $16,055 a year, which is under $16,100, so federal tax drops from $3.08 to $0. Your take-home only falls by $29.42 while you save $32.50.
Two minutes. Just listen.
Tap any line to jump to it.
Stub detective.
Six pay stubs. Each one either has one mistake or is completely right. Read the facts, check each line, then tap the line that's wrong, or "Everything is correct." One try per stub.
What you're looking at: six made-up pay stubs for your campus job, using 2026 rates: Social Security 6.2%, Medicare 1.45%, and federal tax from the standard deduction method.
The logic, step by step.
Five calculations take you from hours worked to the money in your account.
Step 1: Gross pay
- Two weeks
- 40 × $16.25 = $650.00.
Step 2: Social Security and Medicare
Multiply gross pay by each rate. Together they're 7.65%.
- Social Security
- $650 × 0.062 = $40.30.
- Medicare
- $650 × 0.0145 = $9.43.
Step 3: Federal income tax, per paycheck
Turn one check into a year, subtract the standard deduction, tax what's left at 10% (up to $12,400 taxed), then split the year's tax back into checks.
- Year
- $650 × 26 = $16,900. Minus $16,100 = $800 taxed.
- Per check
- 10% × $80026 = $8026 = $3.08.
Step 4: Net pay
- Take-home
- $650.00 − $3.08 − $40.30 − $9.43 = $597.19.
Step 5: What share you keep
Divide net pay by gross pay to see the share you take home.
- You keep
- $597.19$650.00 = 0.919, about 92%. As your pay grows, more of it is above the standard deduction, so this share shrinks.
Worked example: a $1,000 paycheck
- Gross. A summer job: 50 hours × $20 = $1,000.
- Social Security. $1,000 × 0.062 = $62.00.
- Medicare. $1,000 × 0.0145 = $14.50.
- Federal tax. $1,000 × 26 = $26,000. Minus $16,100 = $9,900 taxed. 10% × $9,900 = $990, and $99026 = $38.08.
- Net pay. $1,000 − $62.00 − $14.50 − $38.08 = $885.42, about 89% of gross.
A maple tree pays out a lot less than it makes.
In early spring, sugar maples push sap up from their roots. Farmers collect it and boil it down. Sap is mostly water, about 2% sugar, so it takes roughly 40 gallons of sap to make 1 gallon of maple syrup. What you collect and what you keep are very different numbers.
What you're looking at: an illustration, not data. Sap drips from a tapped maple into a bucket, and boiling it down leaves one small jar of syrup.
Why this sticks. The tree "earns" 40 gallons, but the jar is what you can pour. Your stub is the same: gross pay is the sap, net pay is the syrup. The difference with your paycheck is that nothing boils away for nothing. Your $52.81 pays for roads, Social Security and Medicare.
The page you'd copy down.
- Gross pay: hours × rate, before anything comes out. Pay period: the days a check covers; every other week = 26 checks a year.
- Withholding: taxes your employer takes out and sends to the government for you.
- Federal income tax: figured on your yearly pay above the standard deduction ($16,100 in 2026), starting at 10%.
- FICA = Social Security 6.2% + Medicare 1.45% = 7.65%, from your first dollar. Your employer pays another 7.65%.
- State income tax: most states have one; nine don't tax wages.
- Net pay (take-home) = gross − everything taken out. Budget with this number. YTD = year-to-date totals.
- Pre-tax deduction (like a 401(k)): comes out before income tax, so you pay less income tax. FICA still applies.
- Check every stub: hours, rate, gross, each tax, and that net pay matches your deposit.
Fill in the blanks
Grab a friend or a study group.
Guess the take-home
Someone names an hourly rate and hours. Everyone guesses the net pay, then checks with the calculator. Closest guess wins.
Plant a mistake
One person writes a pay stub with one wrong line. The others race to find it and explain the right number.
Who pays for what?
List three things Social Security or Medicare paid for in your family, like a grandparent's check or a doctor visit.
Just you and your money.
These stay on this device. Nobody else sees them.
Exam-style questions.
Written the way a college exam would ask them. Each right answer on the first try is worth 10 xp.
On the job: you're the payroll specialist
A student worker, Sam, emails you: "My paycheck was only $540.25, but I worked 40 hours at $16.25. Did taxes go up?" You pull up the stub. It shows 36 hours, $585.00 gross, no federal tax, Social Security $36.27 and Medicare $8.48.
Your task: explain to Sam what went wrong, what the stub should have said, and what you'll do about it.
See a model answer
Taxes didn't go up. Hours were missing. The stub paid 36 hours instead of 40, so gross pay was 36 × $16.25 = $585.00 instead of $650.00.
What it should say: gross $650.00, federal tax $3.08, Social Security $40.30, Medicare $9.43, net pay $597.19. Sam was short $597.19 − $540.25 = $56.94 in take-home pay.
What you'll do: check Sam's timesheet, confirm the 4 missing hours with a supervisor, and pay them on the next paycheck or a correction check. Then thank Sam: reading the stub is exactly how mistakes get caught.
From reading your stub to knowing where taxes go.
What you're looking at: a map of where this lesson fits in the course. Read it left to right: the lesson that comes before, this lesson in the middle, and the later lessons that build on it.
- Before · Unit 1Move money safely
- You are hereRead your first pay stub
- Next · Unit 2Where your taxes go
- Later · Unit 2File your first tax return
- Later · Unit 5401(k) and Roth IRA