Every Deduction on Your Paystub Explained
Complete paystub deductions guide — what each is and who controls it
| Deduction | What It Is | Who Controls It | 2025 Details |
|---|---|---|---|
| Federal Income Tax | Tax based on income level and W-4 | You (via W-4) | 10–37% marginal; employer withholds |
| Social Security | FICA contribution for retirement benefits | Fixed by law | 6.2% on first $168,600 wages |
| Medicare | FICA for healthcare at 65+ | Fixed by law | 1.45% on all wages; +0.9% above $200K |
| State Income Tax | State government tax | Varies by state | 0% (TX, FL) to 13.3% (CA) |
| Local/City Tax | City or county tax where applicable | Varies | Exists in NYC, Philadelphia, and others |
| Health Insurance Premium | Your share of employer health plan | Your benefit election | Typically $50–$500/month; pre-tax |
| 401k/403b | Retirement account contribution | You choose % | Reduces taxable income (Traditional) |
| HSA/FSA | Health savings accounts | You choose amount | Pre-tax; reduces FICA and income tax |
| Life insurance (supplemental) | Optional additional coverage | Your election | Post-tax if above $50K coverage |
The Employer’s Hidden Costs (Not on Your Paystub)
Your employer pays additional costs on top of your salary that never appear on your paystub. The employer’s FICA match (6.2% SS + 1.45% Medicare = 7.65% of your wages), employer health insurance contribution (typically $5,000–$20,000/year), employer 401k match, and unemployment insurance. Total employer cost for a $75,000 employee often exceeds $95,000.
Employee salary: $75,000. Employer FICA match: $5,738. Health insurance contribution (employer): $10,000. 401k match (3%): $2,250. Unemployment insurance + workers comp: $750. Total employer cost: $93,738 — 25% above the salary on your offer letter.
See Where Every Dollar of Your Salary Goes
Enter your salary and deductions — get a complete breakdown of each deduction and your exact take-home.