Your first paycheck

The idea in plain words

Your first job offer is a number per hour. Your first paycheck is a different, smaller number. The difference is withholding: money your employer sends to the government on your behalf for income tax and for programs such as Social Security and Medicare. Gross pay is what you earn before those deductions, and net pay, often called take-home pay, is what lands in your account. Understanding the gap before you start work means your budget uses the number you actually receive.

Your plan

1. Read a pay stubFind gross pay, each deduction and net pay on a sample stub.
2. Learn the formsThe W-4 tells your employer how much income tax to withhold. The W-2 summarizes the year.
3. PracticeWork a tax simulation so the numbers feel familiar before they are yours.

Handpicked resources

• NGPF Paycheck Math Activities

  Exercises involving pay stubs and take-home pay.

  FreeGuide & reference

• IRS How Taxes Work Modules

  14 tax preparation modules including income, deductions, dependents and refunds.

  Hidden gemFreeCourse & lessons

• IRS Understanding Taxes, Student

  38 IRS lessons on tax filing, withholding and the tax system.

  Hidden gemFreeCourse & lessons

  Some historic examples/forms may not reflect current tax law.

• IRS Taxpayer Simulations

  20 fictional taxpayer scenarios with W-4, W-2 and 1040 practice.

  Hidden gemFreeGame & simulation

  Review against current tax forms before applying to real filings.

• Intuit Taxes and Career Units

  Lessons using simulated 1040 filing and career-income planning.

  FreeCourse & lessons

Knowledge check

Educational practice, not financial, tax or legal advice.