Why is my take-home pay so much smaller than the offer?

The offer is gross pay. Taxes are withheld and deductions come out before you see it. Net pay, your take-home, is what is left after both.

What does FICA mean on my stub?

FICA is the law that funds Social Security and Medicare. On a stub, those lines are the taxes that pay for those two programs.

What if I am paid on a 1099 and get no stub?

Then nothing is withheld for you, and the tax is not prepaid. It comes due later. People who are paid that way usually set money aside through the year themselves. A tax preparer can tell you how much and how often.

Do I pay state income tax in Texas?

Texas has no state income tax, so most Texas stubs show no state income tax line. Federal taxes still apply.

What is the YTD column for?

It is the running total for the year so far: what you were paid, and what came out. It is useful at tax time and when you want to see the year at a glance.

Learn

Reading your paycheck: gross pay, net pay, and everything in between

By Mickie Byrd · last reviewed 2026-07-13

The first time most of us see a pay stub, we look at one number and put the rest away. The stub is trying to tell you something useful. Once you know the words, it reads in about a minute.

Gross pay is the big number at the top. It is what you were paid before anything comes out of it. If a job pays by the hour, gross pay is the wage times the hours you worked.

Say Marcus works forty hours at twenty dollars an hour, just an example. His gross pay is eight hundred dollars. He does not take home eight hundred dollars. The stub shows every step between those two numbers, and none of the steps are a mystery.

Some money is withheld. Withheld means your employer sends it somewhere for you, before you ever touch it. Federal income tax is withheld. Social Security and Medicare are withheld, and on many stubs those two are printed together as FICA. Texas has no state income tax, so that line is usually blank here.

Withholding is not a fee. It is a prepayment. When you file your taxes, the government compares what was withheld to what you actually owed. If too much was withheld, money comes back to you. If too little was withheld, you owe the difference.

Deductions are a different thing. Deductions are what you signed up for. A health plan premium. A dental plan. Money going into a retirement plan at work. Deductions are your own choices, and the stub usually lists them by name.

Net pay is the number that lands in your account. Gross pay, minus withholding, minus deductions, equals net pay. Net pay is your real number. It is the one your plan runs on.

Not everybody gets a stub. Contract workers, day workers, and people paid on a 1099 have nothing withheld at all. Nobody prepays their tax for them. The bill comes later, all at once, so people in that spot usually set money aside themselves through the year. A tax preparer is the person who works that out.

Most stubs have a column marked YTD. That means year to date. It adds up your pay, and everything taken out of it, since January. It is a quick way to see the whole year without digging up old stubs.

Stubs have mistakes in them. Hours get typed wrong. A raise does not show up. A deduction you cancelled keeps coming out anyway. Reading the stub once a month catches those early, and payroll can only fix what someone points at.

Ask about any line you do not understand. Whoever runs payroll where you work can explain it, even if that is the owner. Some places call it the personnel office.

If the question is really about taxes, a tax preparer is the right person to ask. If it is about a retirement plan choice, that is a question for a licensed professional who can see your whole picture.

This article is general education, not financial, tax, or legal advice. Your situation is your own. For choices about specific products or accounts, talk with a licensed professional who can look at your full picture.

Common questions

Why is my take-home pay so much smaller than the offer?: The offer is gross pay. Taxes are withheld and deductions come out before you see it. Net pay, your take-home, is what is left after both.
What does FICA mean on my stub?: FICA is the law that funds Social Security and Medicare. On a stub, those lines are the taxes that pay for those two programs.
What if I am paid on a 1099 and get no stub?: Then nothing is withheld for you, and the tax is not prepaid. It comes due later. People who are paid that way usually set money aside through the year themselves. A tax preparer can tell you how much and how often.
Do I pay state income tax in Texas?: Texas has no state income tax, so most Texas stubs show no state income tax line. Federal taxes still apply.
What is the YTD column for?: It is the running total for the year so far: what you were paid, and what came out. It is useful at tax time and when you want to see the year at a glance.