Your Pay Stub Tells a Story: How to Read It and Catch Wage Errors Early

Understanding how to read your paystub is one of the simplest and most powerful ways to protect your income and your rights. If your hours don’t match what’s on the paper, something is likely wrong, and you’re entitled to know why!

Why Your Pay Stub Matter

Your paystub is more than a breakdown of numbers. It’s a legal record that shows how your employer calculates your pay and gets you your money. According to the Economic Policy Institute, wage theft costs U.S. workers more than $15 billion each year, often from payroll errors or deductions that gradually lower your earnings.

Reviewing your pay stub regularly can help catch those issues before they go on for too long and end up costing you more money.

Gross Pay vs. Net Pay:

Your Gross Pay is your total income before any taxes or deductions come out. It includes your base pay, overtime, and any bonuses, commissions, and shift differentials you’ve earned.

After those deductions like insurance, taxes, retirement, and others, what’s left over is known as your Net Pay. This is the money that actually makes it into your bank account or your check. If your net pay changes every week without explanation, or if deductions aren’t listed on your pay stub, you should start asking questions!

What are Deductions?

Any employer you receive a pay stub from should you your deductions, but not all paystubs will look the same or even show the same ones. Some of the most common deductions that people get taken out of their paycheck are:

• Mandatory Deductions ~ Federal and state income tax, social security, and Medicare.

• Voluntary Deductions ~ Health insurance, retirement, union dues.

• Other ~ Uniform, tools, or equipment.

One important thing to note is that the total amount that gets deducted from your check should never make your pay fall below the federal minimum wage or the state where you work.

Bonuses and Extra Earnings

Bonuses and incentives often appear on your paystub under additional earnings or supplemental pay. Common examples can include:

• Performance bonuses

• Holiday or end-of-year bonuses

• Retention bonuses

• Sign-On or hiring bonuses

All bonuses are taxable, but that doesn’t mean they can be left off your check. Always make sure the amounts are correct and that they’re clearly listed on your stub.

And here’s the part most workers don’t realize: Non-discretionary bonuses or bonuses that are paid out to you when you meet a specific goal or target MUST be included in your overtime rate. If your employer leaves them out, you may be owed back pay.

Spotting Early Red Flags

Small inconsistencies on your paystub can point to bigger issues. Some things you can look out for:

• Missing overtime

• Reduced hours

• Automatic deductions when you worked through a break or lunch

• Pay rates that don’t match your agreement

• Deductions you didn’t agree to

Even small discrepancies repeated over time can really add up and cause significant damage to your money if left unchecked.

• Missing overtime

• Reduced hours

• Automatic deductions when you worked through a break or lunch

• Pay rates that don’t match your agreement

• Deductions you didn’t agree to

What can you do to protect yourself?

You don’t need to be a payroll expert. Just pay attention and keep records. Track your hours, save your pay stubs, and compare your totals from one pay period to the next. If something doesn’t add up, ask questions early. Small discrepancies can turn into big losses over time.

Josephson Dunlap Is Here to Help

At Josephson Dunlap, we help workers understand their pay records, uncover discrepancies, and recover the pay they’ve earned. Our attorneys focus on protecting workers’ worker’s rights and holding employers accountable. If your paychecks show unusual deductions or your overtime seems off, we can help you find out whether these missing wages can be recovered.