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By Paycheck Calculators Editorial Team • Last updated 2026-11-08

How to Read Your Paycheck

Your paycheck has three parts: gross pay, deductions, and take-home pay. Gross pay is what you earned. Deductions are federal withholding, Social Security, Medicare, state tax, 401(k), and health premiums. Take-home pay is what is left — the money that actually lands in your bank account.

Start at the top. Gross pay is your pay before anything is taken out. Then come the deductions, one line at a time. Federal withholding goes to the IRS. Social Security takes 6.2% of your wages, up to $184,500 in 2026. Medicare takes 1.45%, plus another 0.9% on wages over $200,000. Your state takes its share too — except in Texas, Florida and a few other states, where state income tax is $0. Your 401(k) and health premium come out as well, and both of those lower your federal taxable income. Health premiums also lower the amount Social Security and Medicare are charged on; 401(k) money does not.

The part people miss most is this: your take-home pay is not your salary divided by 26. Tax, Social Security, Medicare and your deductions all come out first. That is why a $60,000 salary does not mean $2,307.69 in your pocket every two weeks — it means $2,307.69 gross, and less after the lines below it.

Worked example

$60,000 salary, single, biweekly, Texas: gross $2,307.69, federal $164.83, FICA $167.36, 401(k) $115.38, health $120.00, state $0. Take-home: $1,740.12.

Frequently asked questions

Why does my take-home change?

Pay frequency, pre-tax deductions, and W-4 choices change withholding. A new W-4, a raise, or a change to your 401(k) rate can all move the number.

Use the Paycheck Calculator to check your own pay — pick your state from the tags at the top and put in your numbers.