Definition
The statement that accompanies each paycheck, showing gross pay, every tax withheld, benefit and retirement deductions, and net pay, plus year-to-date totals. It is the primary record of where your earnings actually go.
Why it matters
Payroll errors, wrong W-4 withholding, and missed 401(k) contributions all show up first on the pay stub, and only if someone looks. It is also the document lenders and landlords request to verify income.
Example
A $6,000 monthly gross paycheck shows $720 of federal withholding, $459 of Social Security and Medicare tax, $300 to a 401(k), $150 for health premiums, and $4,371 of net pay. Reading it, the employee notices the new 401(k) election never started and fixes it before months of match are lost.
Put it into practice
Related terms
This definition is educational, not financial, legal, or tax advice. U.S. rules and limits change; verify time-sensitive details with official sources. See our disclaimer.