What a Paycheck Actually Says: Gross vs. Net Pay
Aligned to JS:EI-2 — Jump$tart National Standards in K-12 Personal Finance Education & Advance CTE Career Clusters.
What this lesson teaches
Gross pay is what you earned. Net pay — take-home — is what is left after deductions: federal and state income tax withholding, Social Security and Medicare (together called FICA), and anything you signed up for like health insurance. The gap surprises almost everyone the first time.
Worked examples
Example 1
20 hours at $15 is $300 gross. After roughly $23 FICA and $25 withholding, net pay is about $252 — around 84% of what you earned.
Example 2
A job offer of '$20 an hour' is a gross number. Budget from your net, or you will plan to spend money that never arrives.
Example 3
Overtime is usually 1.5x your rate past 40 hours in a week. Ten overtime hours at $15 pay $225, not $150.
Practice questions
- Calculate gross pay for 25 hours at $16/hour.
- Name four things that can be deducted from a paycheck.
- Why should a budget be built on net pay, not gross?
Watch the lesson
Every lesson comes with a video taught in English and Spanish — the same video the QR code in the printed workbook opens.
▶ Watch this lessonEn español
Lo que de verdad dice un cheque de pago: bruto contra neto
El pago bruto es lo que ganaste. El pago neto — lo que te llevas — es lo que queda después de las deducciones: retención de impuestos federales y estatales, Seguro Social y Medicare (juntos llamados FICA) y lo que hayas contratado, como el seguro médico. La diferencia sorprende a casi todos la primera vez.
Ejemplo 1: 20 horas a $15 son $300 brutos. Después de unos $23 de FICA y $25 de retención, el neto es como $252 — cerca del 84% de lo que ganaste.
Ejemplo 2: Una oferta de '$20 la hora' es un número bruto. Presupuesta con tu neto, o vas a planear gastar dinero que nunca llega.
Ejemplo 3: Las horas extra normalmente son 1.5 veces tu tarifa después de 40 horas a la semana. Diez horas extra a $15 pagan $225, no $150.
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