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Read a pay stub
Where your paycheck goes before it reaches you, and how to check the math.
Read
Your first paycheck will probably be smaller than you expect, because money comes out before it reaches you.
Gross pay is what you earned: your hourly wage times the hours you worked. Net pay, or take-home pay, is what's left after deductions.
For most workers, the first deductions are FICA taxes: 6.2% for Social Security and 1.45% for Medicare, 7.65% in all. Your employer may also take out federal and state income tax, based on the W-4 form you fill out when you're hired. If you don't earn much in a year, you may get some or all of that income tax back when you file a tax return.
| Item | Amount |
|---|---|
| Gross pay (30 hours × $15.00) | $450.00 |
| Social Security (6.2%) | −$27.90 |
| Medicare (1.45%) | −$6.53 |
| Federal income tax | −$12.00 |
| State income tax | −$8.00 |
| Net pay | $395.57 |
Example pay stub for two weeks of work. The income tax amounts are examples.
Words to know
Write what each word means in your own words.
- Gross pay
- Net pay
- FICA
- W-4
Questions
- What is the gross pay on this stub?
- How much was taken out in all? Show your work.
- What percent of the gross pay is the take-home pay? Round to the nearest whole percent.
- Next pay period you work 40 hours at the same wage. Fill in the table.
Item Amount Gross pay Social Security (6.2%) Medicare (1.45%) - Which form tells your employer how much federal income tax to take out of your pay?
- W-2
- W-4
- 1099
- FAFSA
- Which taxes make up FICA?
- Social Security and Medicare
- Federal and state income tax
- Sales tax
- Property tax
- Using this stub, how much do you take home per hour of work? About how many hours would you work to afford a $300 phone?
Answer key: Read a pay stub
Words to know
- Gross pay: What you earn before taxes and other deductions come out.
- Net pay: What's left of your paycheck after taxes and other deductions. Also called take-home pay.
- FICA: Social Security and Medicare taxes taken out of your paycheck. For most workers, they add up to 7.65% of pay.
- W-4: A form you fill out when you start a job. It tells your employer how much federal income tax to take out of each paycheck.
Questions
- $450.00 (30 hours × $15.00).
- $27.90 + $6.53 + $12.00 + $8.00 = $54.43.
- $395.57 ÷ $450.00 ≈ 0.88, or about 88%.
- Gross pay $600.00. Social Security $37.20. Medicare $8.70.
- B. W-4. (A W-2 is the form you get after the year ends showing what you earned.)
- A. Social Security and Medicare.
- $395.57 ÷ 30 ≈ $13.19 an hour. $300 ÷ $13.19 ≈ 22.7, so about 23 hours.
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