Understanding Your Paycheck

By now, you’ve received your first few paychecks on Fridays, but do you understand everything on the pay stub? Knowing how you’re paid, and what is deducted, is important when trying to budget for the future – knowing your gross pay isn’t going to cut it!

Paycheck Explorer – Click the info hotspots for more information!

Earnings

The left side of your pay stub shows all the money you earned in this pay period. Sum these up to get your “Total Earnings”, or “Gross Pay”.

Deductions

These are the taxes that get taken out of your paycheck. Your “Net Pay” will be your “Gross Income” minus these deductions.

Between OASDI and Medicare, you are paying out 7.6% of every paycheck – and you can’t get this back on your Tax Return. But keep in mind that your employer pays this too! For every $1,000 you earn, your employer is also contributing $76.00 to OASDI and Medicare.

Net Pay

When you subtract your “Deductions” from your “Earnings”, you will get your “Net Pay”. This is the amount actually shown on your paycheck, and how much gets added to your checking account.

Now that you know a bit more about your paycheck, close this lesson to continue the game!

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