Opening your paycheck should be a moment of celebration, but for many, looking at the pay stub feels like reading a secret code. Between terms like FICA, OASDI, and YTD, it’s hard to know exactly where your hard-earned money is going.
As we move through 2025 and 2026, new payroll codes—specifically related to the One Big Beautiful Bill Act (OBBBA)—are appearing on stubs across the USA. Understanding these acronyms is the first step in ensuring your employer is paying you correctly.
In this guide, we’ll decode the most common (and confusing) abbreviations found on U.S. pay stubs.
1. The Basics: Gross vs. Net
Before the acronyms, look for these two main figures:
- Gross Pay: The total amount you earned (Hours x Rate) before any taxes or benefits were taken out.
- Net Pay: Often called “Take-Home Pay,” this is the final amount deposited into your bank account.
2. Mandatory Tax Acronyms
These are the deductions required by federal and state law. You’ll see these on almost every stub in the country.
- FIT (or FED): Federal Income Tax. This is the tax sent to the IRS based on your W-4 settings.
- FICA: Federal Insurance Contributions Act. This is the “umbrella” term for Social Security and Medicare combined.
- OASDI (or SS): Old-Age, Survivors, and Disability Insurance. This is the official name for Social Security. It is a flat 6.2% of your gross pay (up to the 2026 wage base of $184,500).
- MED (or FIM): Medicare Tax. This is 1.45% of your gross pay. Unlike Social Security, there is no income limit.
- SIT (or ST): State Income Tax. If you live in a state like California or New York, this is your state-level contribution.
- SDI / SUI: State Disability Insurance or State Unemployment Insurance. These are small state-level taxes (very common in CA and NJ).
3. Benefits and Retirement Codes
These are usually “voluntary” deductions for programs you’ve opted into.
- 401(k) / 403(b): Contributions to your retirement plan. These are usually “pre-tax,” meaning they lower your taxable income.
- HSA / FSA: Health Savings Account or Flexible Spending Account. Money set aside for medical expenses.
- DEN / VIS / MEDINS: Your portion of the monthly premiums for Dental, Vision, or Medical insurance.
- GTL: Group-Term Life Insurance. If your employer provides life insurance over $50,000, the “value” of that extra coverage may appear here as “imputed income.”
4. NEW for 2025-2026: The OBBBA Codes
Under the latest tax laws, you may see new codes in the “Box 12” or “Earnings” section of your pay stub:
- TT (Total Overtime): A new code used to track qualified overtime pay that may be eligible for federal tax deductions.
- TP (Total Tips): Used for tipped employees to separate gratuities from base hourly wages for tax reporting.
5. Summary Terms
- YTD (Year-to-Date): This is the most important summary term. It shows the total amount you have earned (or paid in taxes) from January 1st until today.
- Rate: Your hourly wage or your salary per pay period.
- Pay Period: The specific dates you are being paid for (e.g., Dec 10 – Dec 24).
Why You Should Check Your Pay Stub Every Month
Errors happen. According to the American Payroll Association, roughly 25% of employees have experienced a payroll error. By “decoding” your stub, you can catch mistakes like:
- Wrong Withholding: If your FIT looks too high, you might need to update your W-4.
- Over-withholding SS: If you have two jobs and earn over the wage base limit, you might be overpaying Social Security.
- Missing Benefits: Ensuring your 401(k) match is actually being deposited.
Conclusion
Your pay stub isn’t just a receipt—it’s a financial document that tells the story of your earnings and your future security. Next time you receive your check, use this guide to ensure every dollar is accounted for.
If the numbers still don’t seem to add up, try using our U.S. States Salary Calculator. Simply enter your gross pay and zip code, and our tool will generate a “mock pay stub” so you can compare it against your actual check