Your First Paycheck, Explained

You get your first job, you work 10 hours at $15, you do the math — $150 — and then the check says something like $128. Where did the rest go? Nobody stole it. Welcome to the difference between gross and net pay.

Gross vs. net

• Gross pay is what you earned: hours × wage. The big number.
• Net pay ("take-home") is what actually lands in your account, after deductions.

The gap is mostly taxes — money taken out automatically and sent to the government to pay for things like roads, schools, and Social Security. This automatic removal is called withholding, and it happens before you ever see the money, which is honestly the government being smart about how people budget.

What's coming out

A few common pieces:

• Federal income tax — depends on how much you make; for a teen with a small job, often little or none, and you may get some back.
• Social Security & Medicare — a flat slice (~7.65%) that funds retirement and health programs.
• State tax — depends where you live; some states take none.

The part that surprises people

Because too much is often withheld, many people who work part-time get a chunk of it back the next spring when they file a tax return. That's not a bonus — it's your own money being returned because the system over-collected. Filing a simple return (free for most students) is how you claim it.

The takeaway

Always think in net, not gross. "I make $15 an hour" is the brochure. "I keep about $13" is the truth, and it's the number you should budget with. Knowing this on day one means you're never caught off guard — and you never overspend money you were never actually going to keep.