Why Is My Paycheck Lower Than Expected? How to Find the Cause

1. The short answer

When a paycheck is smaller than the last one, one or two lines on the pay stub usually explain it. The five most common causes:

1. New benefit premiums or a bigger 401(k), often from open enrollment or the first paycheck of the year.
2. Social Security starting again in January for people who reached the wage base the year before.
3. A bonus, commission or large overtime check withheld at a higher rate.
4. A W-4 change, or a missing or expired W-4.
5. Fewer hours or unpaid time in the pay period.

Compare this stub with your last one line by line. Use the finder above to narrow it down, or the pay stub checker to test each line against 2026 rules.

2. If your gross pay went down

• Fewer hours or unpaid time off. The hours on the stub are lower than usual, or there's an unpaid leave line. Check the hours against your own record. If hours are missing, ask payroll for a correction. Check the gross pay and overtime.
• A 27-paycheck year or a split pay period. Your salary is the same but gross pay per check is lower: some employers divide a salary by 27 in years with 27 biweekly paydays, and a first or last check can cover part of a period. Ask payroll how they divide your salary this year; your yearly pay shouldn't change. Count your paydays this year.
• An overpayment being taken back. A negative earnings line or a deduction labelled overpayment, recovery or adjustment. Ask payroll for the calculation and a repayment plan; state rules on recovering overpaid wages vary.
• A third paycheck in the month. Usually twice a year, biweekly pay brings a third paycheck in one month. Some employers spread monthly deductions differently that month. Compare with the same month's other paychecks.

3. If federal tax went up

• A changed, missing or expired W-4. Federal tax jumped with no change in pay. If no valid W-4 is on file, payroll must withhold as single with no adjustments, and an "exempt" W-4 expires every year unless you file a new one by mid-February (withholding starts with the first paycheck after that). Ask payroll which W-4 they have on file, then give them an updated one. Work out new W-4 entries.
• Bonus or commission withholding. A bonus or commission line, with federal tax of about 22% of it, or a big jump if it was added to regular pay. Nothing is lost: withholding is settled on your tax return. See what the bonus check should look like. Bonus tax calculator.

Withholding isn't your final tax. Anything withheld above what you owe for the year comes back as a refund. The tax refund calculator shows where you're heading.

4. Your first paycheck of the year

January paychecks are often smaller for three reasons: new benefit premiums and contribution amounts start, state payroll deduction rates change on January 1, and Social Security restarts for high earners.

In 2026, Social Security is 6.2% of wages up to $184,500. Someone earning $200,000 and paid every two weeks reaches it after about paycheck 24, so the last paychecks of the year have no Social Security taken out. In January it comes back: about $476.92 a paycheck. For 2027 the wage base rises to $192,300.

• Social Security starts again in January. High earners stop paying Social Security once they reach the yearly wage base. In January it starts again at 6.2% of pay. Nothing to fix: it stops again once you reach the new year's wage base.
• Additional Medicare above $200,000. Once your wages from this employer pass $200,000 in the year, Medicare is withheld at 2.35% (1.45% plus 0.9%) on the pay above that line. It's required withholding; the final amount is settled on your tax return.

5. "I got a raise and my paycheck went down"

Taxes alone can't turn a raise into a smaller paycheck. Tax brackets only tax the part of your income above each line at the higher rate, so you keep a large share of each extra dollar. For a single filer in Texas, going from $60,000 to $63,000 raises take-home pay from $1,938.08 to $2,030.79 a paycheck (+$92.71).

If take-home fell, something else changed at the same time: a 401(k) set as a percentage (3% of the new pay is more), health premiums priced by salary band, losing overtime after a move to salaried pay, a new W-4 with a smaller Step 3 amount, or a retroactive adjustment. With a 401(k) raised from 3% to 6% at the same time, the same raise leaves take-home at $1,902.85 instead of $1,877.15: still up, by $25.70, with $76.15 more going into the 401(k) each paycheck.

6. Overtime, tips and the 2025 tax law

The 2025 tax law created federal deductions for qualified tips and for the FLSA-required overtime premium (2025 through 2028). They're claimed on your tax return. They don't change your paycheck by themselves:

• Social Security and Medicare still apply to tips and overtime.
• Federal income tax is withheld as usual unless you enter the expected deduction in W-4 Step 4(b).
• A paycheck with a lot of overtime can be withheld at a higher rate, because payroll treats each paycheck as if you earned that much all year.

Estimate the deduction with the overtime and tips calculator, then decide whether to adjust your W-4.

7. State and local changes

• A new or higher state payroll deduction. A line such as MN Paid Leave (new in 2026), CA SDI or WA PFML appeared or grew. These rates change on January 1. Check the rate on the stub against your state's published rate. Check state deductions.
• A new state or local tax after a move. A new state, city, county or school district line, or tax for two states. Make sure payroll has your current home and work address; ask about reciprocity if you cross a state line. See take-home in your new state.

Examples for 2026: Minnesota's paid leave program started on January 1, 2026, with an employee share of up to 0.44% of wages (0.33% at the smallest employers); California SDI rose to 1.3%; and Washington's paid family and medical leave premium rose from 0.92% to 1.13%, with employees paying 71.43% of it (about 0.81% of wages).

8. Deductions and imputed income

• Higher benefit premiums or new elections. Health, dental, vision, FSA or HSA lines went up, often with the first paycheck of the plan year. Compare with your enrollment confirmation. Pre-tax premiums lower your taxes too, so take-home falls by less than the premium. Benefits paycheck calculator.
• A bigger 401(k) or HSA contribution. The 401(k) or HSA line grew: automatic escalation, a new percentage, or a percentage of a higher salary. It's your money, saved for retirement (before tax, unless it's a Roth contribution). Since 2026, catch-up contributions must be Roth if last year's wages from that employer were over $150,000, which raises federal withholding. Change the amount with your plan if it's more than you meant. 401(k) paycheck calculator.
• Benefit catch-up after leave. Doubled or extra benefit deductions after unpaid leave, to cover premiums the employer paid while you were out. Ask HR for the amount owed and whether it can be spread over more paychecks.
• A garnishment, child support order or tax levy. A line such as GARN, CS, LEVY or WAGE ORDER. Your employer must follow the order, but federal law limits most garnishments (IRS and state tax levies follow their own rules), and you can't be fired over garnishment for one debt. Contact the agency or court named on the order if it looks wrong.
• Imputed income such as group-term life insurance. An income line marked GTL or "imputed" that isn't paid to you. The cost of employer-paid life insurance above $50,000 of coverage counts as taxable pay (income tax withholding on it is optional). It's normal. Social Security and Medicare apply to it, so those lines rise a little.

9. Worked examples

Computed with our paycheck calculator and bonus tax calculator.

10. Is it a payroll error? How to get it fixed

1. Find the line. Compare this stub with the last one, or run it through the pay stub checker.
2. Gather proof: both stubs, your hours, your W-4 and your benefit confirmation.
3. Ask payroll or HR in writing, naming the line, the amount you expected and why.
4. If wages are missing and it isn't fixed, contact your state labor department or the U.S. Department of Labor's Wage and Hour Division.
5. If too much tax was withheld, it isn't lost: it comes back when you file. Social Security over-withheld by two employers comes back as a credit on your return.

11. Common questions

Why is my first paycheck of the year smaller?

New benefit premiums and contributions usually start, state deduction rates change on January 1, and Social Security restarts if you reached the wage base last year.

Why did my paycheck go down in January?

New benefit premiums and FSA or HSA amounts usually start with the plan year; most are pre-tax, so take-home falls by less than the premium. The benefits paycheck calculator shows the exact change.

My take-home went down after a raise. Is that the tax?

No. Taxes alone can't do it, because only income above a bracket line is taxed at the higher rate. Look for a percentage-based deduction, a salary-banded premium, lost overtime or a retroactive adjustment that started at the same time.

Why was more federal tax taken out this paycheck?

A bonus or commission, a big overtime check, a new or missing W-4, or an expired exempt claim are the usual reasons.

Why isn't 'no tax on overtime' showing on my paycheck?

It's a deduction on your tax return. Withholding only changes if you account for it on your W-4.

Why is my paycheck different every pay period?

Hours, overtime, tips, a third paycheck in a month and deductions that come out only some paychecks all change it.

Why does my stub show income I didn't receive?

That's imputed income, such as the cost of employer-paid life insurance above $50,000 of coverage. It's taxable but not paid to you.

What should I do if a deduction looks wrong?

Check it against what it should be with the pay stub checker, then ask payroll in writing.

Sources

1. Publication 15 (2026), (Circular E), Employer's Tax Guide — IRS. Accessed November 2, 2026. Supplemental wages, Form W-4 and exempt status, tips and overtime.
2. Topic no. 751, Social Security and Medicare withholding rates — IRS. Accessed November 2, 2026.
3. 2026 Social Security changes — Social Security Administration. Accessed November 2, 2026.
4. Rates and withholding (State Disability Insurance) — California EDD. Accessed November 2, 2026.
5. Paid Leave premiums — Minnesota DEED. Accessed November 2, 2026.
6. Paid Family and Medical Leave premium rate for 2026 — Washington Employment Security Department. Accessed November 2, 2026.
7. Social Security wage base increases to $192,300 for 2027 — American Payroll Association. Accessed November 2, 2026.
8. Publication 15-B, Employer's Tax Guide to Fringe Benefits (group-term life insurance) — IRS. Accessed November 2, 2026.
9. About Form W-4, Employee's Withholding Certificate — IRS. Accessed November 2, 2026.
10. Fact Sheet #30: The Federal Wage Garnishment Law — U.S. Department of Labor. Accessed November 2, 2026.