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Understand your income

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You have an offer for a new job. It will pay you 40 hours per week starting at $15 per hour, which means you’ll be taking home $600 (40 X 15) dollars a week. True or False?

False!

There are numerous deductions from your gross pay (time worked multiplied by the pay rate). Understanding your paycheck and net pay  (the amount you actually receive after deductions) is essential to understanding where you stand financially.

Payroll information

Thoroughly review every paystub or notice of pay. If your employer directly deposits your pay into your bank account, you might need to request the notice (for example, by logging into your payroll system).

Make sure deductions from your pay are correct, and report any problems to your employer immediately. If you have questions, meet with a Human Resources representative and discuss your employer’s benefits.

Standard deductions

Your employer will withhold the following from your pay:

*Exemptions are the number of people you support with your income. The more exemptions you claim, the smaller the tax withholding from your pay. You indicate the number of exemptions you claim on the federal W-4 form. 

The number of exemptions you claim on the W-4 can differ from the number that you may claim when filing taxes. However, if you claim more exemptions on your W-4 in order to increase your take home pay, you could end up owing money when you file your tax return.

Other possible deductions: