Paychecks and taxes, explained

Your first paycheck usually comes as a surprise: it's less than your hourly pay times your hours. That's because of the difference between gross pay and net pay.

Gross pay is everything you earned before anything comes out. Net pay, or take-home pay, is what actually lands in your account. The difference is deductions, and your pay stub lists each one:

• Federal income tax, based on how much you earn. Many teens with small part-time jobs get some or all of it back after filing a tax return.
• State income tax in most states.
• FICA: 6.2% for Social Security and 1.45% for Medicare, 7.65% in all. These pay for benefits for retirees and some others, and you'll earn your own credits toward them.
• Sometimes other things you choose, like health insurance or a 401(k) retirement plan.

When you start a job, you fill out a W-4. It tells your employer how much federal tax to hold back from each check. If too much is held back, you get a refund when you file. Too little and you owe.

Taxes pay for public goods and services: roads, schools, the military, and programs like Social Security and Medicare.

The habit that matters: when you think about a job offer, plan with your net pay, not your hourly rate. A $15-an-hour job, 20 hours a week, is $300 gross, but you might take home closer to $270 or less, depending on your state.