Your first paycheck, step by step.
A first job comes with a few new words and a few small decisions. This is a short, friendly walkthrough: what the lines on a pay stub mean, why your take-home pay is smaller than the number you were told, the basics of the W-4 form, and a simple way to decide where your money goes.
Every line on a pay stub, in plain words
A pay stub comes with each paycheck. It is a receipt: it shows what you earned and every amount taken out before the money reaches you. Here is a simple example for one paycheck. The numbers are made up and round so the pieces are easy to see.
- Gross pay$1,000.00
What you earned before anything is taken out
- Federal income tax- $90.00
Sent to the federal government toward your taxes
- State income tax- $35.00
Sent to your state (some states have none)
- Social Security- $62.00
6.2% that funds retirement and disability benefits
- Medicare- $15.00
1.45% that funds health coverage for older adults
- Net pay (take-home)$798.00
The lines taken out are called deductions. Most first paychecks include federal and state income tax and two payroll taxes, Social Security and Medicare. The bottom line, your net pay, is what actually lands in your account.
- The pay-stub example uses round, made-up numbers to show how the lines fit together. Your real stub will look different, and the exact deductions depend on your pay, your state, and your choices.
- The split tool is a starting idea, not a rule. A common beginner split is most of your pay to spending and living costs, a slice to saving, and a small slice to give if that matters to you. Adjust it to your own situation.
- The W-4 is a real federal form you fill out when you start a job. The notes here describe it in plain language and are not tax advice. The official instructions on the form itself are the source to follow.
- This is financial education, not advice, and it does not recommend any specific bank, account, or company.