Three federal taxes come out of nearly every paycheck in the United States: federal income tax, Social Security tax, and Medicare tax. Together they usually take between 20% and 35% of gross pay, depending on how much you earn and how you filled out your Form W-4. Federal income tax is the largest and most variable of the three. Social Security and Medicare are flat rates set by law. Here is what each line on your paystub means, how the amounts are calculated, and why they change from one pay period to the next.
The Abbreviations You’ll See
Payroll systems shorten every tax label, and different employers use different codes for the same deduction. Federal income tax typically appears as FIT, FWT (Federal Withholding Tax), or Fed Tax. Social Security tax may show as SS, OASDI (Old Age, Survivors, and Disability Insurance), or FICA-SS. Medicare tax is usually MED, HI (Hospital Insurance), or FICA-MED. Some stubs merge Social Security and Medicare into a single FICA line; others separate them.
Each deduction generally shows two numbers: the amount withheld this pay period and a year-to-date total. The YTD column matters more than it looks, because Social Security withholding stops once your earnings pass an annual cap.
Federal Income Tax
Federal income tax is an estimate. It is not a fixed percentage of your wages, and it is not the final tax you owe. Your employer withholds a projected share of your annual liability each pay period, spread across the year, so that by December the total withheld lands close to what you actually owe.
The calculation uses two inputs: your gross taxable wages for the period and the information on your Form W-4, the Employee’s Withholding Certificate.1Internal Revenue Service. Topic No. 753, Form W-4, Employees Withholding Certificate The W-4 tells your employer your filing status, whether you have dependents, whether you work more than one job, and whether you want extra dollars withheld. Your employer runs those inputs through the IRS withholding tables in Publication 15-T.2Internal Revenue Service. Publication 15-T, Federal Income Tax Withholding Methods
Those tables reflect the same graduated brackets that apply on your annual return. For 2026, a single filer’s brackets are:
- 10% on income up to $12,400
- 12% from $12,401 to $50,400
- 22% from $50,401 to $105,700
- 24% from $105,701 to $201,775
- 32% from $201,776 to $256,225
- 35% from $256,226 to $640,600
- 37% above $640,600
Married couples filing jointly get wider brackets — the 22% band, for example, runs from $100,801 to $211,400. The withholding formula also shields the standard deduction, which is $16,100 for single filers and $32,200 for joint filers in 2026, so that portion of your pay is effectively untaxed in every check.3Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
When your W-4 is accurate, total withholding for the year lands near your actual bill, producing a small refund or small balance due. When it is out of date — a marriage, a new child, a second job never reported — the mismatch shows up as a large refund or an unexpected tax bill in April.
Social Security Tax
Social Security tax is a flat 6.2% of your gross wages.4Social Security Administration. Social Security Tax Rates Your W-4 does not change it. Filing status does not change it. Every worker pays the same rate on every dollar of wages, up to a cap.
The cap for 2026 is $184,500.5Social Security Administration. Contribution and Benefit Base Once your year-to-date wages cross that amount, the 6.2% deduction stops for the rest of the calendar year, and your take-home pay rises accordingly. If you work two jobs and your combined wages exceed the cap, both employers will keep withholding, and you claim the excess back as a credit on your tax return.
Your employer pays a matching 6.2% on top of your wages. That contribution does not appear on your stub.6Internal Revenue Service. Publication 926, Household Employer’s Tax Guide
Medicare Tax
Medicare tax is 1.45% of every dollar of wages, with no annual cap.7Internal Revenue Service. Topic No. 751, Social Security and Medicare Withholding Rates Your employer also matches this rate.
Once your wages with a single employer top $200,000 in the calendar year, that employer must withhold an Additional Medicare Tax of 0.9% on the wages above $200,000.8Internal Revenue Service. Topic No. 560, Additional Medicare Tax Your employer does not match the extra 0.9%. It may appear as a separate line on your stub or roll into the regular Medicare line.
The $200,000 withholding trigger is per employer and ignores filing status, but the tax itself uses different thresholds when you file: $250,000 for married filing jointly and $125,000 for married filing separately.9Internal Revenue Service. Questions and Answers for the Additional Medicare Tax If withholding overshoots what you actually owe, the difference comes back on your return.
How Pre-Tax and Post-Tax Deductions Change Your Withholding
Not every deduction on your stub reduces the same taxes. Pre-tax deductions come out of your wages before federal income tax is calculated, so they shrink your FIT withholding. Traditional 401(k) contributions and employer-sponsored health insurance premiums are the common examples.10Internal Revenue Service. Retirement Plan FAQs Regarding Contributions A $500 traditional 401(k) contribution takes $500 off your taxable wages before withholding is computed.
Post-tax deductions come out after taxes are calculated. Roth 401(k) contributions, union dues, wage garnishments, and some life insurance premiums fall here. They do not lower your withholding.
One important detail: traditional 401(k) contributions reduce federal income tax withholding but are still subject to Social Security and Medicare taxes. So on the same paystub, your FICA deductions may be calculated on a higher number than your FIT deduction.
Why the Federal Income Tax Line Moves
Even at a steady salary with an unchanged W-4, the FIT line can shift from one paycheck to the next.
Bonuses and Other Supplemental Wages
Bonuses, commissions, overtime, and severance count as supplemental wages. When paid separately from your regular check, your employer may withhold federal income tax on them at a flat 22%.11Internal Revenue Service. Publication 15, Employer’s Tax Guide That can feel high if your effective rate is lower, but it is only withholding. You reconcile it when you file. If your supplemental wages cross $1 million in the year, the rate on everything above the first million is 37%, and your W-4 cannot reduce it.
Pay Frequency
The withholding formula divides your projected annual tax by the number of pay periods. Weekly pay produces 52 smaller withholdings; biweekly produces 26; semimonthly produces 24. The annual total lands in roughly the same place, but rounding and bracket boundaries can shift a given pay period’s number.
Mid-Year Changes
A new W-4, a new pre-tax deduction, or crossing the Social Security wage base all change what you take home. The Social Security shift is the most visible: the first pay period after your YTD earnings pass $184,500, your net pay jumps by 6.2% of your gross.5Social Security Administration. Contribution and Benefit Base
Imputed Income
Some stubs include a line called imputed income — money you never receive but that the IRS treats as taxable. Employer-provided group life insurance is the usual source. The first $50,000 of coverage is tax-free; the cost of coverage above that amount gets added to your taxable wages and raises your FIT and FICA withholding.12Internal Revenue Service. Group-Term Life Insurance Personal use of a company car, dependent care benefits above the annual exclusion, and educational assistance above $5,250 can show up the same way.13Internal Revenue Service. Employer’s Tax Guide to Fringe Benefits If an unfamiliar income line is inflating your gross wages, imputed income for a fringe benefit is a likely explanation.
Adjusting Withholding With a New W-4
You can submit a new Form W-4 to your employer any time. Most people only need Steps 1 (name and filing status) and 5 (signature). The middle steps handle the situations that most often throw withholding off:
Step 2 applies when you hold more than one job, or when you are married filing jointly and your spouse also works. The options are to use the IRS Tax Withholding Estimator, complete the Multiple Jobs Worksheet on page 3 of the W-4, or check the box that splits the standard deduction and brackets in half for each job.14Internal Revenue Service. Form W-4 (2026) Employee’s Withholding Certificate Ignoring this step is the most common cause of under-withholding for dual-income households, because each employer applies the full standard deduction as if its paycheck were the only income.
Step 3 claims tax credits for dependents. For 2026, the child tax credit is $2,200 per qualifying child under 17, and the credit for other dependents is $500. Entering these amounts spreads the benefit across your paychecks instead of waiting for a refund.
Step 4(c) lets you request a specific dollar amount of extra withholding per period. It’s useful if you have non-wage income (investments, rental property, a side business) that would otherwise leave you short.
What Happens If Too Little Is Withheld
If your withholding and estimated payments fall short of your actual tax, the IRS charges an underpayment penalty, calculated as interest on the shortfall and compounded daily at a rate that adjusts quarterly. For the first half of 2026, that rate is 6% to 7%.15Internal Revenue Service. Quarterly Interest Rates
Two safe harbors avoid the penalty: owing less than $1,000 when you file, or paying at least 90% of the current year’s tax (or 100% of last year’s, whichever is smaller) through withholding and estimated payments. If your prior-year adjusted gross income exceeded $150,000 ($75,000 if married filing separately), the prior-year figure rises to 110%.16Internal Revenue Service. Underpayment of Estimated Tax by Individuals Penalty
If your income is steady and your W-4 reflects your real situation, ordinary payroll withholding keeps you safe. Problems come from unreported changes — a spouse starting work, a second job, exercised stock options. The IRS Tax Withholding Estimator compares your current withholding to your projected liability and tells you exactly how to adjust a new W-4 if you need to.17Internal Revenue Service. Tax Withholding Estimator