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Guide to your paycheck

Your paycheck offers a lot more than just the cash you take home. A deeper look offers useful information about what you spend on taxes, benefits and other deductions.

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Employee name



Check amount




1. Gross pay

2. Federal income tax

State income tax

Social Security


3. Health insurance*




4. Net pay

1. Gross pay
The total amount you are paid during each cycle—your pay before any deductions are taken out. This is not the amount you take home, however.

2. Mandatory deductions
The deductions you have to pay by law are:

  • Federal income tax—from 10–37%, depending on income
  • State income tax—(not in all states)—from 1–10% or more
  • Social Security tax—6.2%
  • Medicare tax—1.45%

3. Voluntary deductions
You may have elected to pay for these things:

  • Health insurance premiums
  • Retirement account contributions
  • Flexible Spending Accounts (FSAs)
  • Commuter benefits

* The abbreviations on your pay stub might not be obvious—which one represents retirement, for example. Check with HR if you have questions.

4. Net pay
Your net pay is your gross pay minus mandatory and voluntary deductions. It’s also known as your take-home pay, or the amount of pay you actually take home at the end of the day.

Gross pay minus Mandatory deductions minus Voluntary deductions = Net pay

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The material provided on this website is for informational use only and is not intended for financial, tax or investment advice. Bank of America and/or its affiliates, and Khan Academy, assume no liability for any loss or damage resulting from one’s reliance on the material provided. Please also note that such material is not updated regularly and that some of the information may not therefore be current. Consult with your own financial professional and tax advisor when making decisions regarding your financial situation.

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Neither Bank of America nor any of its affiliates or financial advisors provide legal, tax or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.