JagInsights › Glossary › Paycheck
What is on a paycheck?
A paycheck lists gross pay, taxes, and deductions, then the deposit. How to read the lines that shrink the number.
A paycheck is the record of one pay period: gross pay at the top, then taxes and other deductions, then the net amount that is paid to you.
Worked example
Gross for two weeks is $2,000. Federal income tax $180, state tax $60, Social Security $124, Medicare $29, health insurance $90, retirement $80. Deductions are $563. The deposit is $1,437. Two of those deposits are the monthly take-home if you are paid every other week, except in months with three paydays.
Why it matters
People budget the gross number printed at the top. The deposit at the bottom is the only number the rent can be paid from.
Questions people ask
Why is Social Security taken out if I am young?
It is a federal payroll tax on wages. It is not optional on a regular employee paycheck.
Is a retirement deduction gone?
It left this paycheck and went into your retirement account. It still counts in net worth. It does not count as money you can spend this month.
What is a three-paycheck month?
If you are paid every other week you get 26 checks a year, so two months have three. Do not build rent around the three-check month.
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