4. Understanding a Paycheck
This activity aims to explain a pay stub to understand their earnings, deductions, and takehome pay.
Discuss
Being able to understand your paycheck and pay stub is a very important skill. Let’s pretend you just got your first paycheck. Congratulations! You are probably pretty excited to be earning money and can’t wait to buy that item you have been saving up for. BUT, when you look at your paycheck, the amount is less than what you expected it to be!! If you don’t understand your pay stub, you might think the company you work for cheated you out of some money! This is typically not the case. Understanding your pay stub will help you know exactly how much money you are earning and why your take-home pay may be different from what you expected.
Resource
Paycheck Walkthrough. This worksheet provides an example of gross pay vs net pay and a paycheck example. Students can use this sample pay stub and questions to practice how to read a pay stub. The Paycheck Walkthrough – Answer Key is available to help with this activity.
Click and Explore
Here are some sites to check out for more information about paychecks along with examples.
- Understanding Your Pay, Benefits, and Paycheck | GFC Global – includes an interactive mock pay stub.
- Calculating the Numbers in Your Paycheck | Consumer Financial Protection Bureau – a guide for how to review paychecks including sample pay stub and questions.
Extending the Conversation
If you have worked or are working, consider bringing in a pay stub (with permission). This is for your learning, so you won’t have to share your personal information with others. Look at parts like gross pay, net pay, taxes, and other deductions.
- Now that you know more about how to read a paycheck, what do you notice?
- How many hours did you work?
- What was your gross pay (before deductions)? What was your net pay (after deductions)?
- What questions do you still have after looking at your paycheck?