Verified against official sources — 31 Oct 2026

Reading Your US Payslip and Form W-2: A Newcomer's Guide

NEW Published 31 October 2026

Illustration for reading your us payslip and form w-2

Your payslip explained line by line, the two payroll taxes almost every worker pays, and the W-2 boxes that carry those numbers onto your tax return and your Social Security record.

Your first US payslip can look like a coded message: gross, net, YTD, FICA, a list of deductions you never itemised yourself. The payslip and the Form W-2 are two views of the same money. The payslip is your employer's own per-period statement — no federal law prescribes its format, so this guide describes how payslips conventionally work. The W-2 is different: the official annual summary your employer must give you by 31 January, its boxes defined by IRS instructions, its figures flowing into both your tax return and your Social Security record. Items are labelled RULE (verified against the sources below) or ADVICE.

Quick answer

Your payslip shows one pay period: gross pay at the top, deductions in the middle — federal income tax, the two FICA payroll taxes (Social Security at 6.2% and Medicare at 1.45% of covered wages), and any benefit or retirement deductions — and net pay at the bottom. No federal law requires your employer to give you a payslip at all, though your state may. The document with legal force is the Form W-2: your employer must provide it by 31 January, and its Boxes 1–6 report your taxable wages, the federal income tax withheld, and your Social Security and Medicare wages and taxes for the year. Not arrived by the end of January? Contact your employer. Still missing at the end of February? The IRS tells you to call them — and you can file using Form 4852, built from your final payslip, if it never comes.

SECTION 01The Payslip Itself: What Each Line Conventionally Means

A payslip (also called a pay stub or earnings statement) is a description before it is anything else: read this section as how payslips conventionally work in the United States, not as federal requirements — the one firm federal position is at the end of the section. Layouts vary by employer, but the vocabulary is stable:

Pay period and pay date — the span of days the payment covers, and the date the money is paid; the two rarely match.
Hours and rate — for hourly workers, the hours worked and the hourly rate, with overtime usually a separate line at a higher rate; salaried workers often see a per-period salary amount.
Gross pay — everything you earned in the period before anything is taken out: wages or salary, plus overtime, bonuses and similar payments.
Deductions — everything subtracted, itemised line by line: tax deductions first in most layouts (Section 02), then benefit and retirement deductions (Section 03).
Net pay — gross pay minus all deductions: the amount deposited to your bank account or paid by cheque. If it and the actual deposit ever disagree, that is a payroll error to raise immediately.
YTD (year to date) — a second column accumulating each line from 1 January to the current period: the running total the W-2 later confirms, making your final payslip a preview of the form.

RULE — Federal law requires the records, not the payslip. The US Department of Labor's guidance states the position exactly: the Fair Labor Standards Act (FLSA) does require employers to keep accurate records of hours worked and wages paid, but the FLSA does not require an employer to provide employees pay stubs. There is therefore no standard federal payslip and no federal right to demand one.

RULE — Your state may say more. Pay-statement rules beyond the federal floor are set state by state: some states require a written or electronic statement with specified contents, others do not. We deliberately print no state-by-state table here; your state labour agency is the authority for the rule where you work.

ADVICE — Keep every payslip. Save each one, or download the year's set from your payroll portal before you leave a job. Payslips are your own evidence of hours, rates and withholding if a figure is ever disputed — and, as Section 08 shows, your final payslip is the document the IRS tells you to build a substitute W-2 from if the real one never arrives. Our guide to starting work on H-1B and the first month covers what happens around it.

SECTION 02The Two Payroll Taxes: Social Security and Medicare (FICA)

Two deduction lines appear on almost every US payslip, sometimes labelled separately as "Social Security" and "Medicare", sometimes grouped as "FICA". The IRS describes FICA in its own terms: taxes under the Federal Insurance Contributions Act are composed of the old-age, survivors, and disability insurance taxes — the Social Security taxes — and the hospital insurance taxes — the Medicare taxes. In plain terms, the first funds Social Security retirement, survivors' and disability benefits, and the second the Medicare hospital insurance programme.

RULE — The rates are 6.2% and 1.45%, and your employer matches both. The IRS's current withholding-rates guidance: the tax rate for Social Security is 6.2% for the employer and 6.2% for the employee, and the rate for Medicare is 1.45% for the employer and 1.45% for the employee. Only your share is deducted from your pay; the employer's matching share is paid on top of your wages.

RULE — Social Security tax stops at a wage ceiling; Medicare tax does not. Only the Social Security tax has a wage base limit — the maximum wage subject to the tax for the year. For earnings in 2026 that limit is $184,500, published by both the IRS and the Social Security Administration; once your covered wages pass it, Social Security withholding stops for the rest of the year (so the most that can be withheld for 2026 is $11,439). There is no wage base limit for Medicare tax: all covered wages are subject to it. The ceiling is reset periodically, so treat $184,500 as the 2026 figure, not a permanent one.

RULE — High earners pay an extra 0.9% Medicare tax, with no employer match. Employers must also withhold a 0.9% Additional Medicare Tax on wages paid in excess of $200,000 in a calendar year, starting in the pay period the threshold is crossed and continuing to year-end. It is imposed only on the employee — so on a very high earner's payslip, the Medicare line can grow late in the year even though the base rate has not changed.

SECTION 03Deductions Before Tax and After Tax — and Why "Gross" Is Not One Number

Between gross pay and net pay, payslips conventionally group deductions into two families — a distinction that decides which of your totals the tax system later sees (description of the convention; the tax consequences are the IRS's own, in Section 06):

Pre-tax deductions come out of pay before income tax is calculated on it. Common examples are contributions to a workplace retirement plan such as a 401(k), and the employee share of premiums under an employer's health plan. Money taken this way does not appear in the "taxable wages" total on your W-2 — the most common reason a newcomer's W-2 wages look lower than the salary they negotiated.
Post-tax deductions come out after tax has been calculated: contributions to a Roth retirement account, union dues and similar items. These do not reduce the taxable-wage total.
Statutory deductions — the taxes of Section 02 plus income taxes — are withheld because the law requires it, and sit in their own group on most payslips.

ADVICE — Read your first payslip against your offer letter. Gross per period multiplied by the pay periods in a year should equal your annual salary (or hours × rate for hourly work); then walk each deduction line and make sure you can name what it is. Any line you cannot identify is a question for payroll while the job is new — corrections are far easier in the same pay period than at year-end.

SECTION 04A Newcomer Exception: Students and Scholars Who Should Not See FICA at All

RULE — Nonresident alien students and scholars in F, J, M or Q status are exempt from both taxes. The IRS states that nonresident aliens temporarily present in the United States in F-1, J-1, M-1 or Q-1 status are exempt from Social Security and Medicare taxes on wages for services performed in the US, as long as the work is allowed for their status and is performed to carry out the purpose for which they were admitted — the IRS's examples include on-campus employment, off-campus employment allowed by USCIS, and practical training such as CPT and OPT.

RULE — The exemption has edges, and they matter. It does not extend to spouses and children in F-2, J-2 or M-2 status; it does not cover work that is not allowed for the status or not connected to the purpose of admission; and it ends for a person who becomes a resident alien for tax purposes, or changes to a non-exempt status. Resident aliens are taxed under the same rules as US citizens — so an H-1B worker's payslip should show both FICA taxes in full.

ADVICE — If you are exempt and FICA is being withheld, act in the same month, not at tax time. Payroll departments do make this error with international hires, and an in-year correction is far simpler than a refund claim later. Whether you are a nonresident or resident alien for tax purposes is the question everything turns on — our US taxes guide for international students explains it.

SECTION 05Form W-2: The Year's Official Summary, Due to You by 31 January

RULE — Every employer you worked for owes you one. The IRS: every employer engaged in a trade or business who pays remuneration for services performed by an employee must file Form W-2 for each employee — the form applies where income, Social Security or Medicare tax was withheld, among other cases. Two jobs in the year means two W-2s; a mid-year change of employer does not cancel the old employer's form.

RULE — The deadline is 31 January. Forms W-2 are required to be provided to employees by 31 January, and the employer must also file its copies with the Social Security Administration (transmitted with Form W-3) by the same deadline. Where the date falls on a Saturday, Sunday or legal holiday, it moves to the next business day — for the 2026 form, the IRS's current instructions set the furnishing date as 1 February 2027, because 31 January 2027 is a Sunday.

RULE — Leaving a job does not cancel the form — and you can ask early. If your employment ends before 31 December, the employer may furnish your copies at any time after employment ends, but no later than the January deadline; and if you ask for your W-2, the employer must give you the completed copies within 30 days of your request or final wage payment, whichever is later.

RULE — The W-2 carries your Social Security number, never an ITIN. The IRS instructs employers not to accept an ITIN in place of an SSN for employee identification or W-2 reporting, and a worker who holds only an ITIN and later becomes eligible to work must obtain an SSN. Our ITIN guide explains what an ITIN is for, and what it is not for.

SECTION 06The W-2 Boxes That Matter Most: 1 to 6

The numbered boxes are defined in the IRS's General Instructions for Forms W-2 and W-3. Boxes 1–6 are the core every newcomer should be able to read — and the same numbers are what your tax return picks up in Section 07.

Box 1 — Wages, tips, other compensation. "Show the total taxable wages, tips, and other compensation that you paid to your employee during the year." Crucially, Box 1 excludes elective deferrals such as contributions to a 401(k) or 403(b) plan — so it is normally lower than your gross salary if you contributed to a retirement plan or paid health premiums pre-tax (Section 03). Designated Roth contributions are included.
Box 2 — Federal income tax withheld. "Show the total federal income tax withheld from the employee's wages for the year." The sum of every federal income tax deduction on your payslips, credited against your tax bill when you file — withheld too much and the difference returns as a refund; too little and you owe.
Box 3 — Social security wages. "Show the total wages paid (before payroll deductions) subject to employee social security tax" — note "before payroll deductions": retirement-plan deferrals that vanish from Box 1 are reported here. Boxes 3 and 7 (social security tips) together cannot exceed the year's wage base — $184,500 for 2026.
Box 4 — Social security tax withheld. "Show the total employee social security tax (not your share) withheld" — your 6.2% across the year, which for 2026 should not exceed $11,439.
Box 5 — Medicare wages and tips. The wages and tips subject to Medicare tax are the same as those subject to Social Security tax, "except that there is no wage base limit for Medicare tax" — so above the ceiling, Box 5 is larger than Box 3, and that is correct, not an error. The IRS's own worked example: on wages of $199,750, Box 3 shows 184,500.00 and Box 5 shows 199,750.00; at or below the ceiling the two are the same.
Box 6 — Medicare tax withheld. "Enter the total employee Medicare tax (including any Additional Medicare Tax) withheld" — your 1.45%, plus the 0.9% additional tax if it applied; only your share, never the employer's.

ADVICE — Boxes 12 and 14 exist too. Box 12 reports coded items (in spaces 12a–12d) — retirement-plan deferrals appear there under their codes, which is how you reconcile Box 1 against Box 3. Box 14 (split into 14a and 14b on the 2026 form) is the employer's "other" information space. Worth a glance when a total looks unexplained.

SECTION 07After the W-2: Your Social Security Record and Your Tax Return

RULE — Your W-2 wages become your permanent Social Security earnings record. The employer's copy goes to the Social Security Administration, which — in the IRS's words — uses SSNs "to record employees' earnings for future social security and Medicare benefits." A wrong wage figure is therefore not only a tax problem this spring; unrecorded, it understates the earnings history your eventual benefits are calculated from.

RULE — You can check that record yourself, and SSA asks you to do it yearly. With a personal my Social Security account, your Statement is available online: it shows your earnings history, lets you verify your reported earnings, and SSA encourages reviewing it annually. If a year's earnings are missing or wrong, the statement itself explains how to report an error. Comparing it against your W-2 Box 3 total each year is the simplest long-term check.

RULE — The same figures feed your tax return, and the IRS cross-checks them. The employer provides the W-2 copy, in the IRS's words, "so they can accurately report the wages you paid to them," and the IRS checks employer-reported payments against employees' tax returns. In practice your return takes its wage figure from Box 1 and its withholding credit from Box 2 (state boxes 15–20 do the same job for state taxes). Which return you file, and on what residency basis, is its own subject — the F-1 taxes guide covers the student position, and the ITIN guide the number used for filing without an SSN.

SECTION 08If the W-2 Never Comes — or Comes Wrong

The IRS publishes a step-by-step route for both problems; follow it in the order given.

RULE — Missing, step 1: not received by the end of January — go to the employer. The IRS's first instruction is simply: contact your employer to confirm when the form is coming. Most missing W-2s are address or portal problems.

RULE — Missing, step 2: still nothing by the end of February — call the IRS. If you contacted your employer and still do not have your W-2, call the IRS at 800-829-1040, with your name, address and phone number, your Social Security or individual tax ID number, your dates of employment, and the employer's name, address and phone number ready. The IRS will contact your employer and request the missing W-2 — and will also send you a copy of Form 4852, Substitute for Form W-2.

RULE — Missing, step 3: filing time arrives anyway — use Form 4852. If the W-2 does not arrive in time to file, the IRS instructs: use your paycheck stubs to estimate your wages, complete Form 4852, and attach it to your tax return. This is where the year's payslips — above all the final one, with its YTD column — become the substitute document.

RULE — Wrong W-2: the correction is a W-2C, and it starts with the employer. Ask your employer to correct the error: the corrected statement is Form W-2c, Corrected Wage and Tax Statement. If the employer has not corrected it by the end of February, call 800-829-1040 or make an appointment at an IRS Taxpayer Assistance Center — the IRS will send your employer a letter asking them to give you a corrected W-2 within 10 days, and will send you instructions for Form 4852 so you can estimate your earnings in the meantime.

RULE — Already filed on wrong figures? Amend. If you filed using incorrect W-2 information and the corrected figures change it, file an amended return with the correct information once you have them.

FAQFrequently Asked Questions

My employer never gives me a payslip. Is that allowed?

Under federal law, yes: the Department of Labor states that the FLSA requires employers to keep accurate records of hours worked and wages paid, but does not require them to provide employees pay stubs. Your state may impose its own pay-statement rule — a question for your state labour agency. Either way, ask payroll how your pay is itemised, and keep your own record of hours and rates.

Why is Box 1 on my W-2 lower than my salary?

Most often because of pre-tax deductions. Box 1 is your total taxable wages, and the IRS instructions exclude elective deferrals — such as contributions to a 401(k) or 403(b) plan — from it. Those contributions are still reported in Boxes 3 and 5 for Social Security and Medicare purposes, and under their codes in Box 12: the money has not vanished, it is counted in different boxes.

Boxes 3 and 5 on my W-2 are different. Is that a mistake?

Not by itself. Box 3 (Social Security wages) is capped at the year's wage base — $184,500 for 2026 — while Box 5 (Medicare wages) has no cap. The IRS's own example shows wages of $199,750 producing a Box 3 of 184,500.00 and a Box 5 of 199,750.00; at or below the ceiling, the two should match.

I am an F-1 student and Social Security tax is coming out of my pay. Should it be?

Probably not, if you are a nonresident alien for tax purposes and the work is allowed for your status and connected to the purpose of your admission: the IRS exempts F-1, J-1, M-1 and Q-1 nonresident aliens from Social Security and Medicare taxes on those wages. Raise it with payroll promptly — an in-year correction is the cleanest fix — and see Section 04 for the exemption's limits, including that it ends once you become a resident alien for tax purposes.

It is March and my W-2 still has not arrived. What do I do?

Follow the IRS's sequence in Section 08: you should already have contacted your employer (the end-of-January step); now call the IRS at 800-829-1040 with your details and your employer's ready. The IRS will contact the employer and send you Form 4852 — and if filing time arrives with no W-2, estimate your wages from your paycheck stubs (the final payslip's year-to-date column is the key document) and attach the completed form to your return.

Editorial note: This AllVisaUpdates guide is general educational information about reading a US payslip and Form W-2. It is not tax advice — withholding, tax residency, and treaty positions turn on your own facts. Items labelled RULE come from the official sources below, checked on 31 October 2026. Two parts are descriptions rather than rules, framed as such: the payslip vocabulary in Section 01 and the pre-tax / post-tax grouping in Section 03, because no federal source prescribes a payslip's format. Figures are stated for 2026, because the Social Security wage base changes over time.

Official references and verification status

These official references were accessed and checked on 31 October 2026, and this guide's RULE items were verified claim-by-claim against them (record in the accompanying .sources.md file). Two honest limits. First, description rather than law: no federal source prescribes the format of a payslip — the Department of Labor states that the FLSA requires employers to keep accurate records of hours and wages but does not require them to provide pay stubs — so Sections 01 and 03 describe how payslips conventionally work. State pay-statement requirements exist in some states and are deliberately not tabulated here; readers are directed to their state labour agency. Second, the year-specific figures: the wage base ($184,500), the maximum employee Social Security tax ($11,439), and the 1 February 2027 furnishing date are stated for the 2026 form, read from the IRS's current instructions and rate guidance, with the wage base corroborated on the Social Security Administration's own table. Publication 15 (Circular E) was not itself opened in this pass — no claim here depends on text unique to it.

General educational information, not individualized tax advice. Consult a qualified tax professional for case-specific questions.

General information only. This guide is based on official sources publicly available and checked on the date shown on this page. Visa rules change, and consular and USCIS officers decide every case on its own facts — nothing here is a confirmation or a guarantee for your individual case, and this is not legal advice. Always confirm the current requirement on the official page linked in this guide before you act, and consider a qualified immigration attorney for your specific situation.