Why is my paycheck so small?
At $20 an hour, two weeks of full-time work is $1,600. A typical paycheck lands closer to $1,250. Here's where the other $350 goes, line by line.
A real example: $20 an hour in North Carolina
| Line on the pay stub | Every two weeks | Why |
|---|---|---|
| Gross pay (80 hours × $20) | $1,600.00 | |
| Health insurance (pre-tax) | −$45.00 | Comes out before taxes, so it lowers them |
| 401(k), 3% (pre-tax) | −$48.00 | Your savings, not a tax |
| Federal income tax | −$96.99 | Based on your W-4 |
| Social Security (6.2%) | −$96.41 | On pay after health insurance |
| Medicare (1.45%) | −$22.55 | |
| North Carolina tax (3.99%) | −$40.56 | After a $12,750 deduction |
| Take-home pay | $1,250.49 |
Single, no dependents, W-4 Step 2 unchecked, paid every two weeks. Calculated with 2026 IRS and North Carolina figures.
The usual reasons, in order
- Social Security and Medicare take 7.65%. Almost everyone pays these on every dollar of pay, with no standard deduction. They fund your future retirement and health benefits.
- Federal income tax depends on your W-4. Your employer uses it to estimate your yearly tax and takes a slice each payday. If you checked the Step 2 box or skipped claiming children in Step 3, more comes out.
- State and local taxes. Most states tax wages, at rates from under 2% to over 9%, and some cities and counties add their own. Nine states don't tax wages at all. See your state.
- Benefits you chose. Health, dental and vision insurance and retirement savings come out of your check. Most come out before taxes, which lowers your tax.
- State payroll programs. A few states, like California, New York, New Jersey and Washington, take a small amount for disability or paid family leave.
- Pay periods. “Every two weeks” isn't twice a month. You get 26 checks a year, so most months have two and two months have three.
When to look closer
If your check is far below what a calculator shows, compare each line on your pay stub. Common surprises are a wrong state, a missed W-4 update after having a child, garnishments, union dues, or extra withholding you asked for years ago. Your payroll or HR team can explain any line you don't recognize.
Questions
Will I get the withheld tax back?
Only the part that is more than you actually owe for the year. Credits like the Earned Income Tax Credit and Child Tax Credit can also add to your refund. Estimate your refund.
Can I change how much is taken out?
Yes. Give your employer a new Form W-4 at any time. The IRS Tax Withholding Estimator at irs.gov can help you fill it out.
Do I pay Social Security on tips and overtime?
Yes. The new federal deductions for tips and overtime lower income tax only. Social Security and Medicare still apply.
Related
Sources
- IRS Publication 15-T (2026) · Federal income tax withholding
- IRS · Tax Withholding Estimator
- Tax Foundation · 2026 state income tax rates
General information for planning, not financial, tax or legal advice. Figures are estimates for 2026 and can change. Leftover Planner is not affiliated with the IRS or any government agency.