:INFO
Gross to Net: What Actually Happens
Your employer agrees to pay you a salary or hourly rate. That figure is your gross pay. What arrives in your bank account is your net pay, and the difference is made up of mandatory taxes withheld by law, voluntary pre-tax deductions you chose when you enrolled in benefits, and sometimes post-tax deductions on top of that.

Most pay stubs list these as a column of abbreviations with dollar amounts. This reference decodes every category using 2026 figures from the IRS and the Social Security Administration.

:IMAGE

:INFO
The Mandatory Taxes: No Choice, No Opt-Out
Two taxes appear on every US pay stub regardless of employer or state. Together they are called FICA, for the Federal Insurance Contributions Act. Your employer matches both amounts on top of your wages.

Social Security (labeled OASDI on most stubs) is 6.2% of your gross wages, but only up to the annual wage base. In 2026 that cap is $184,500. Once your year-to-date earnings cross that threshold, withholding stops for the rest of the year.

Medicare is 1.45% of every dollar you earn, with no cap. High earners owe an extra 0.9% on wages above $200,000 (single filers) or $250,000 (married filing jointly), but only the employee pays that extra 0.9%.

Federal income tax (FWT or FIT on your stub) depends on your W-4 elections, filing status, and tax bracket. It is not a flat rate.

:STATS
[icon:CHART] Social Security (OASDI) rate | 6.2% employee, 6.2% employer match
[icon:TARGET] Social Security 2026 wage base | $184,500. Withholding stops once YTD earnings cross this.
[icon:CHART] Medicare (MED) rate | 1.45% employee, 1.45% employer match, no wage cap
[icon:BOLT] Additional Medicare Tax | 0.9% on wages above $200,000 single / $250,000 married, employee only
[icon:DOLLAR] Federal income tax (FWT/FIT) | Varies by W-4 elections and filing status. Not a flat rate.

:LINK
https://www.irs.gov/taxtopics/tc751
IRS Topic 751: Social Security and Medicare withholding rates for 2026

:INFO
Pre-Tax Deductions: Lines That Reduce Your Taxable Income
Pre-tax deductions come out of your gross pay before income taxes are calculated, reducing the federal and state income tax you owe. FICA taxes still apply to most of them, but health insurance premiums under a Section 125 cafeteria plan are exempt from FICA as well.

The IRS sets annual contribution limits for each account type. Exceeding the limit in a given year triggers a penalty.

:STATS
[icon:STAR] 401(k) or 403(b) employee limit 2026 | $24,500. Age 50-59 and 64+: add $8,000. Age 60-63: add $11,250.
[icon:STAR] HSA limit 2026 (self-only) | $4,400 per year. Requires a qualifying high-deductible health plan.
[icon:STAR] HSA limit 2026 (family) | $8,750 per year. Age 55+: add $1,000 catch-up.
[icon:CHART] Healthcare FSA limit 2026 | $3,400. Use-it-or-lose-it; most plans allow a $660 rollover.
[icon:CHART] Dependent Care FSA limit 2026 | $7,500 per household. Covers childcare and adult day care costs.
[icon:CHECK] Medical, dental, vision premiums | Pre-tax under a Section 125 plan. No IRS dollar cap.

:LINK
https://www.irs.gov/newsroom/401k-limit-increases-to-24500-for-2026-ira-limit-increases-to-7500
IRS: 2026 401(k) and IRA contribution limits

:INFO
Post-Tax Deductions: After the Taxes Are Calculated
Some deductions come out after all taxes have been applied. You do not get an income tax break on these now, but some carry a long-run advantage.

Roth 401(k) contributions are after-tax, so qualified withdrawals in retirement are entirely tax-free. The same $24,500 employee limit applies in 2026, shared with any traditional pre-tax 401(k) contributions you make to the same plan.

Life insurance imputed income (GTL) appears when your employer provides group term life coverage above $50,000. The IRS treats the cost of coverage above that threshold as taxable wages, even though you never see the cash.

Wage garnishments are court-ordered post-tax deductions for child support, student loans in default, or tax levies. Federal law limits garnishment to 25% of disposable earnings in most cases, or up to 65% for child support.

:INFO
The Abbreviation Decoder
Pay stubs rarely spell out what each line means. Here are the most common abbreviations.

:STATS
[icon:CHECK] FICA | Federal Insurance Contributions Act. The law covering Social Security and Medicare.
[icon:CHECK] OASDI | Old-Age, Survivors, and Disability Insurance. The formal name for Social Security tax.
[icon:CHECK] MED | Medicare tax withholding (1.45% employee share, no wage cap).
[icon:CHECK] FWT or FIT | Federal Withholding Tax / Federal Income Tax withheld each pay period.
[icon:CHECK] SWT or SIT | State Withholding Tax / State Income Tax. Nine states have no income tax.
[icon:CHECK] YTD | Year-to-date. Running total of earnings or deductions since January 1.
[icon:CHECK] GTL | Group Term Life. Imputed income on employer-paid coverage above $50,000.
[icon:CHECK] HSA | Health Savings Account. Paired with a high-deductible health plan (HDHP).
[icon:CHECK] FSA | Flexible Spending Account. Healthcare or dependent care, employer-administered.
[icon:CHECK] AD&D | Accidental Death and Dismemberment insurance, often bundled with life coverage.

:NOTE
As of October 2026. Wage base limits, FSA maximums, and HSA caps adjust each year for inflation. Confirm current figures at irs.gov before making benefit elections.

:LINK
https://www.ssa.gov/oact/cola/cbb.html
SSA: Social Security contribution and benefit base (wage cap) by year