The taxes on your pay stub, explained line by line, come down to a small set of deductions: federal income tax, Social Security and Medicare (together called FICA), and, in most states, a state income tax. Depending on where you work, you may also see a local income tax and a contribution to a state disability or paid family leave program. Everything else on the stub is either your gross pay, your pre-tax deductions (retirement, health insurance), or your net pay.
Federal Income Tax
The federal line, usually labeled FIT or FED, is money your employer withholds from each paycheck and sends to the IRS on your behalf, so you pay as you earn instead of writing one check in April.1Internal Revenue Service. Tax Withholding for Individuals The amount is not a flat percentage. Federal income tax uses a progressive bracket structure, so the first dollars of your taxable income are taxed at the lowest rate and each higher band is taxed more. For 2026, the brackets run from 10% on the first $12,400 of taxable income for a single filer up to 37% on income above $640,600.2Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
Two things drive the number you actually see withheld: your wages for the pay period and the Form W-4 you gave your employer.3Office of the Law Revision Counsel. 26 USC 3402 – Income Tax Collected at Source The W-4 tells payroll your filing status, any dependents, and whether you want extra withheld. Change jobs, get married, have a child, or pick up a side income, and the number that made sense before may not fit anymore.
Social Security and Medicare (FICA)
FICA is the umbrella term for the two flat-rate deductions that fund Social Security and Medicare. They come out of every covered dollar at the same percentage, unlike federal income tax.
The Social Security line, sometimes labeled SS, SOC SEC, or OASDI (Old-Age, Survivors, and Disability Insurance), takes 6.2% of your gross wages.4General Services Administration. Social Security Tax Deferral – Section: What Is OASDI? Your employer pays a matching 6.2% that never appears on your stub. In 2026, the tax stops applying once your year-to-date wages pass $184,500, so if you earn above that cap, the Social Security line drops to zero for the rest of the year.5Social Security Administration. Contribution and Benefit Base The cap moves up each year with average wages.
The Medicare line, labeled MED or MCARE, is 1.45% of all wages with no cap, matched again by your employer.6Office of the Law Revision Counsel. 26 USC 3101 – Rate of Tax Add Social Security and Medicare together and the employee side of FICA is 7.65% up to the Social Security wage cap, and 1.45% above it.
The Extra Medicare Tax on Higher Wages
Once your wages from a single employer cross $200,000 in a calendar year, an extra 0.9% Additional Medicare Tax kicks in on every dollar above that mark.7Internal Revenue Service. Topic No. 751 – Social Security and Medicare Withholding Rates On the stub it may appear as a separate line labeled Addl MED or MED SURTAX. Employers do not match this surtax. The $200,000 trigger applies regardless of your filing status for withholding purposes; the amount you actually owe on your return is figured against $250,000 for joint filers and $125,000 if married filing separately, and you settle up when you file.6Office of the Law Revision Counsel. 26 USC 3101 – Rate of Tax
State Income Tax
Most workers also see a state income tax line, typically ST or SWT. Nine states don’t impose a broad-based personal income tax, so employees there won’t have this deduction at all. Elsewhere, the withholding mechanics look similar to the federal side: payroll calculates the amount based on your wages and state-specific rules and sends it to the state revenue agency. Rate structures vary. Some states apply a single flat rate; others use progressive brackets. Which state’s tax you pay depends on where you work, where you live, or both.
Local or City Tax
In some metropolitan areas, a city or county tax also appears, often labeled LOC or CITY and sometimes framed as an occupational or local services tax. These are usually smaller than the state deduction, but in cities with their own income tax systems they can be a meaningful line.
State Disability and Paid Family Leave
Roughly a dozen states and territories require employees to contribute to disability insurance or paid family and medical leave programs through payroll withholding. These deductions fund benefits you can claim if you’re unable to work because of illness, injury, or family caregiving. Rates run from a fraction of a percent up to about 1.3% of wages depending on the state. Common labels are SDI for state disability insurance and PFL or PFML for paid family and medical leave. If you’ve just moved from a state without these programs, the new line item can look unfamiliar; it isn’t an error.
Why Your Tax Lines May Be Smaller Than You Expect
Some deductions come out of your gross pay before taxes are calculated, which shrinks the wages the tax lines are based on. Traditional 401(k) or 403(b) contributions are the most common example. In 2026, you can contribute up to $24,500 across these plans, with an additional $8,000 catch-up allowance for workers 50 and older and an $11,250 catch-up for those 60 through 63.8Internal Revenue Service. 401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500 Traditional 401(k) contributions lower your federal and state income tax withholding, but they do not reduce Social Security or Medicare taxes.
Health, dental, and vision premiums paid through a Section 125 cafeteria plan usually come out pre-tax as well, and those contributions typically avoid both income tax and FICA. Health FSAs let you set aside pre-tax dollars for out-of-pocket medical costs (up to $3,400 in 2026), and dependent care FSAs allow up to $7,500 per household in 2026.9FSAFEDS. New 2026 Maximum Limit Updates If your stub shows a “taxable wages” figure lower than your gross pay, this is why.
The Abbreviations on Your Stub
Pay stubs use tight shorthand. The codes you’re most likely to see:
- FIT or FED — federal income tax.
- SS, SOC SEC, or OASDI — Social Security tax.
- MED or MCARE — Medicare tax; Addl MED or MED SURTAX is the 0.9% surtax on wages above $200,000.
- ST or SWT — state income tax.
- LOC or CITY — local or city income tax.
- SDI — state disability insurance.
- PFL or PFML — paid family or paid family and medical leave.
Your stub should also show gross pay (total earnings before anything is taken out), a breakdown of pre-tax deductions such as retirement contributions and insurance premiums, and net pay (what actually reaches your bank account). If an abbreviation on your stub doesn’t match anything above, your employer’s payroll or HR team can tell you what it means.
Checking Your Stub for Errors
Withholding is legally the employer’s responsibility to get right, but under-withholding still leaves you owing the balance when you file.3Office of the Law Revision Counsel. 26 USC 3402 – Income Tax Collected at Source A quick monthly scan of your stub takes about two minutes. Compare it against the W-4 you filed, watch for the Social Security line dropping to zero after you cross the annual cap, and check that any Additional Medicare Tax kicks in when your wages pass $200,000. In January, compare the year-to-date figures on your final December stub with the numbers on your W-2. Discrepancies between the two are worth raising with payroll right away, before they turn into a filing-season problem.