PPaycheckCals

Payroll Glossary

Every term that appears on a US pay stub or payroll form, defined properly rather than circularly, with the 2026 numbers attached.

Gross payTotal earnings for a pay period before any tax or deduction is taken. Net payThe amount actually deposited after every tax and deduction — also called take-home pay. FICAThe combined Social Security and Medicare payroll tax — 7.65% for the employee in 2026. WithholdingTax your employer removes from each paycheck and remits on your behalf as a prepayment toward your annual bill. Form W-4The IRS form that tells your employer how much federal income tax to withhold. Form W-2The annual statement of wages and taxes withheld that your employer sends you and the IRS.

The vocabulary problem

Payroll has three overlapping vocabularies and they contradict each other. There is the legal vocabulary of the Internal Revenue Code and the Fair Labor Standards Act, which is precise and unfamiliar. There is the payroll-software vocabulary of abbreviated stub codes, which is compact and inconsistent between vendors. And there is everyday speech, where 'exempt' means two completely different things depending on whether you are talking about overtime or about withholding.

The result is that a single concept can appear as OASDI, SS, FICA or SOC SEC on four different stubs, while one word can mean two things on the same form. These entries define each term as it is actually used, note where it appears on a pay stub, and flag what it is commonly confused with.

The distinctions that cost money

Four are worth internalising. Withholding is not tax — it is a prepayment, and the difference is settled on your return. Gross is not taxable is not net — three different figures, and using the wrong one is how budgets fail. Marginal is not effective — the first tells you what an extra dollar costs, the second what your income as a whole costs. And a Section 125 deduction is not a retirement deferral — both are pre-tax, but only one escapes Social Security and Medicare, a difference of 7.65 percentage points on every dollar.

If you are working through a specific paycheck rather than a specific word, the pay stub guide takes a stub apart line by line and the paycheck calculator runs the numbers.