Getting a job and earning money are the first steps towards being an adult. Whether it’s a hustle cutting grass, babysitting, walking dogs, or a part-time job, you can use the money you earn to reach your goals.
Once you have a job, choose a bank and open a checking account. Most likely, your job will give you the option to direct deposit your check into your checking account. Direct deposit simply means instead of getting a paper check, your money will be automatically deposited into your checking account. With that said, we’ll teach you how banks operate in our Banking 101 section. But, for now, let’s learn how to read your paycheck.
Reading Your Paycheck
Not being able to interpret the data on your paycheck could possibly cause you to lose money. A review of your paycheck will inform you of any accidental or intentional loss of money. Our illustration below labels and explains each section that is printed on your paycheck.

- Pay Period – These are the working days that you are paid for.
- Rate – This is how much you are paid for each hour you worked.
- Gross Pay – This is the total amount of money you earned during this pay period.
- YTD – This is how much money you have earned for the year.
- Required Deductions – 5 through 8 are required deductions. When your earnings exceed $7,600 in a year, you will begin to pay federal income tax. All workers pay into Social Security and Medicare. Both programs are funded by FICA, a payroll tax. FICA stands for Federal Insurance Contributions Act (FICA) tax.
- (9) Other deductions – 9 through 11 are voluntary. These can include premiums for health insurance and your contributions to a retirement account.
- (12) Net Pay – This is what’s called your “take-home” pay. The money left over after all deductions have been subtracted out.
Important Acronyms and Abbreviations
Here are some acronyms and abbreviations you may come across when reading your pay stub:
- FT is Federal Tax
- ST is State Tax
- SS is Social Security
- MWT (sometimes referred to as Med) is Medicare