Between your gross pay and the amount that hits your bank account, several things get deducted from your paycheck: federal income tax, Social Security and Medicare taxes, usually state and sometimes local income tax, your share of health insurance premiums if you enrolled, contributions to retirement and health savings accounts you elected, and, in some cases, court-ordered garnishments. Some of these are mandatory. Others only appear because you signed up for them.
Mandatory Tax Withholding
The biggest variable deduction on most paychecks is federal income tax. The federal system runs on a pay-as-you-go basis, so instead of paying a lump sum in April, your employer estimates and withholds a portion of each paycheck.1Internal Revenue Service. Tax Withholding for Individuals The amount depends on your earnings and what you put on Form W-4: filing status, dependents, and any extra withholding you request.
If too little comes out, you may owe a balance and possibly a penalty when you file. If too much comes out, you get a refund, which really means you loaned the government money interest-free. The IRS offers a free Tax Withholding Estimator to help you check whether your W-4 needs updating.2Internal Revenue Service. IRS Tax Withholding Estimator Helps Taxpayers Get Their Federal Withholding Right
Social Security and Medicare (FICA)
Every paycheck also has FICA taxes withheld. Under 26 U.S.C. ยง 3101, you pay 6.2% of your wages for Social Security and 1.45% for Medicare, a combined 7.65%.3Office of the Law Revision Counsel. 26 USC 3101 – Rate of Tax Your employer pays a matching 7.65%, but that half never comes out of your wages and does not show up on your paystub.
Social Security has an annual wage cap. For 2026, that cap is $184,500, and once your year-to-date wages reach it, Social Security withholding stops for the rest of the year.4Social Security Administration. Contribution and Benefit Base Medicare has no cap. If your wages exceed $200,000 in a year, or $250,000 filing jointly, an Additional Medicare Tax of 0.9% applies to the amount above that threshold.5Internal Revenue Service. Topic No. 560, Additional Medicare Tax
State and Local Income Tax
Most states impose an individual income tax, with top rates roughly between 2.5% and 13.3%. Eight states, including Texas, Florida, and Tennessee, have no state income tax, so workers there will not see this line at all. Some cities and counties add a local income tax on top of the state rate. Certain states also require small payroll deductions, typically well under 1% of wages, to fund short-term disability or paid family and medical leave programs. Your paystub lists these separately from federal taxes.
Health Insurance Premiums
If you enrolled in your employer’s medical, dental, or vision plan, your share of the premium comes out of each paycheck. This deduction only appears if you actively signed up during open enrollment or after a qualifying life event. Most employers pay a large portion of the total premium and spread your share across pay periods, and adding a spouse or children raises the per-paycheck amount.
When premiums run through a Section 125 cafeteria plan, as they do at most large employers, the money comes out pre-tax. That lowers your taxable income and reduces both federal income tax and FICA.
Employers often offer supplemental benefits alongside core coverage: extra life insurance, short-term or long-term disability, accident, and legal plans. These are usually deducted after taxes. The trade-off is that if you later collect disability payments from a plan you funded with after-tax dollars, those payments are generally not taxable income.6Internal Revenue Service. Life Insurance and Disability Insurance Proceeds
HSA and FSA Contributions
Two tax-advantaged accounts commonly reduce your paycheck while lowering your tax bill.
A Health Savings Account is available if you are enrolled in a high-deductible health plan. Contributions run through payroll pre-tax, unspent money rolls over indefinitely, and withdrawals for qualified medical expenses are tax-free. For 2026, the contribution limit is $4,400 with self-only coverage and $8,750 with family coverage.7Internal Revenue Service. Expanded Availability of Health Savings Accounts Under the One, Big, Beautiful Bill Act
A Healthcare Flexible Spending Account works similarly on the pre-tax side, but generally follows a use-it-or-lose-it rule. The 2026 maximum contribution is $3,400, and many employers allow a carryover of up to $680 into the following year.8Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 Some employers set a lower carryover or offer a grace period instead, so check your plan documents.
Retirement Plan Contributions
If your employer offers a 401(k), 403(b), or similar plan, you choose the percentage of pay to contribute. For 2026, the salary deferral limit is $24,500. Workers age 50 and older can add a catch-up contribution of up to $8,000, and those age 60 through 63 qualify for a higher catch-up of $11,250.9Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026
Traditional contributions come out pre-tax and lower your taxable income for the year. A Roth 401(k) or Roth 403(b) works the other way: money is deducted after taxes, so you pay tax now and can withdraw the money tax-free in retirement.10Internal Revenue Service. Retirement Topics – Contributions Your employer sends the money to the plan’s financial institution each pay period.
Court-Ordered Wage Garnishments
Some deductions are not voluntary. A garnishment is a legal order directing your employer to withhold money for an unpaid debt: child support, alimony, defaulted federal student loans, unpaid taxes, or consumer debts like credit card judgments.11U.S. Department of Labor. Fact Sheet #30 – Wage Garnishment Protections of the Consumer Credit Protection Act Your employer receives the order and must comply.
Federal law caps how much can be taken, and the limit depends on the debt:
- Consumer debts such as credit cards, medical bills, and personal loans: no more than 25% of disposable earnings, or the amount by which weekly disposable earnings exceed 30 times the federal minimum wage, whichever is less.12Office of the Law Revision Counsel. 15 USC 1673 – Restriction on Garnishment
- Child support and alimony: up to 50% of disposable earnings if you are supporting another spouse or child, or up to 60% if you are not. An extra 5% can be taken if payments are more than 12 weeks overdue.11U.S. Department of Labor. Fact Sheet #30 – Wage Garnishment Protections of the Consumer Credit Protection Act
- Defaulted federal student loans: up to 15% of disposable earnings through administrative garnishment.11U.S. Department of Labor. Fact Sheet #30 – Wage Garnishment Protections of the Consumer Credit Protection Act
Garnishments continue until the debt is paid or a court terminates the order. Your employer cannot fire you solely because your wages are being garnished for a single debt.
Deductions Your Employer Cannot Take
Not everything an employer might try to deduct is legal. Under the Fair Labor Standards Act, an employer cannot deduct business expenses from your pay, including required uniforms, tools, damaged property, or unpaid customer tabs, if the deduction would push your effective hourly pay below the federal minimum wage or eat into overtime you are owed.13U.S. Department of Labor. Fact Sheet #16 – Deductions From Wages for Uniforms and Other Facilities Under the Fair Labor Standards Act Common examples include:
- Uniforms and their maintenance if the employer requires a specific uniform.
- Tools and equipment needed to do the job.
- Cash register shortages or walkout tabs charged to tipped employees.
- Vehicle repairs or damage to employer property.
These federal restrictions protect the minimum wage floor. Many states go further and prohibit certain employer-initiated deductions outright, regardless of whether your wages stay above the minimum. If your employer is taking money out for breakage, shortages, or equipment, check whether the deduction is lawful under both federal and state rules.14eCFR. 29 CFR Part 531 – Wage Payments Under the Fair Labor Standards Act of 1938
Checking and Adjusting Your Deductions
Reviewing your paystub regularly is how you catch errors. Most employers offer a digital payroll portal where you can download an itemized earnings statement each period. Look for the “Deductions” or “Withholdings” section, which breaks out every amount by category.
Check the year-to-date totals in particular. Compare your cumulative retirement contributions against the annual limit of $24,500 for 2026, and confirm your FSA or HSA contributions are pacing toward the amount you elected.9Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026 If a line looks wrong or unfamiliar, contact payroll or HR quickly, because small errors can compound over a year.
Life changes are the trigger to revisit your W-4 and benefit elections: a new job, marriage, a new child, or a big income shift. The IRS recommends checking your withholding at least once a year and submitting a new W-4 as soon as needed, since withholding changes only apply going forward and cannot be applied retroactively.2Internal Revenue Service. IRS Tax Withholding Estimator Helps Taxpayers Get Their Federal Withholding Right Keeping your paystubs on file also makes filing your annual return easier.