Ever wonder what happens to the money in your paychecks from your summer job? You'll soon find out that you're not the only one who has claims on what you earn!
Example: You work 25 hours over a two-week pay period. Your pay is $8.24 an hour. You figure you should see $206 on your paycheck, right?
Sort of. But not in your pocket. There's a big difference between gross income—or your hourly rate times the hours you work—and net income, or the money you put in your pocket—your take home pay.
Your gross income is reduced by deductions. Look at your pay stub—the earnings statement—attached to your check. It includes:
- Your identification information
- The dates of the pay period
- Your gross income
- All your deductions, which include taxes and FICA
- Your net income
You can't control all the factors that lead to paycheck deductions, but you can do two things to raise your pay, one for now and one for later:
- For now—Keep your eyes open for opportunities to take on more responsibility. Your boss may show appreciation for your enthusiasm by promoting you. Even if that doesn't happen, you are building a good work ethic and developing skills that could lead to better pay in your next job.
- For later—Make smart decisions about your education. Staying in school increases your chance of earning more money in life. Take the same attitude to school that you take to work: Show up on time, do your job, and be polite.
As you look to future classes, look for ways to earn extra credit, take advanced placement courses, form relationships with your teachers, and volunteer for school events. All of these can "pay off" with good grades, possible career experience, and excellent letters of recommendation for college.
Copyright 2010 Credit Union National Association Inc. Information subject to change without notice. For use with members of a single credit union. All other rights reserved.