Question 1

Why is my check so much less than my salary?

Accepted Answer

Federal tax, state tax, Social Security (6.2%), Medicare (1.45%), health insurance, and 401k contributions all come out before you see a dollar. Most people take home 65–75% of their gross salary.

Question 2

What is FICA?

Accepted Answer

FICA = Social Security (6.2%) + Medicare (1.45%). Everyone pays this regardless of income. Your employer pays the same amount on top of that.

Question 3

Does 401k reduce my taxes?

Accepted Answer

Yes! Traditional 401k contributions come out pre-tax, so they reduce your taxable income. Contributing 6% doesn't cost you 6% of take-home — it costs less because you'd have paid taxes on it anyway.

Question 4

What's gross vs net pay?

Accepted Answer

Gross = your salary. Net = what actually hits your bank after all deductions. Net is the number that matters for budgeting.

Question 5

How do I fill out my W-4 form correctly?

Accepted Answer

The W-4 tells your employer how much federal tax to withhold. Single with no dependents can typically use the default. Claiming too many allowances means a tax bill in April; too few means a big refund but smaller paychecks.

Question 6

What is the difference between biweekly and semi-monthly pay?

Accepted Answer

Biweekly pays every two weeks giving you 26 paychecks per year including two months with three checks. Semi-monthly pays on set dates like the 1st and 15th giving exactly 24 paychecks per year.

Question 7

Should I opt into my employer health insurance?

Accepted Answer

Yes if you are under 26 and your parents' plan is better you can stay on theirs. Otherwise employer plans are usually cheaper than marketplace options because your employer subsidizes 50 to 80 percent of the premium cost.

Question 8

How much of my paycheck should I save?

Accepted Answer

Aim for 20 percent of take-home pay following the 50/30/20 rule: 50 percent for needs, 30 percent for wants, and 20 percent for savings and debt repayment. Start with any amount and increase gradually.

💸 First Paycheck Decoder

Your Info

Where Your Money Goes — Annual

Per Paycheck (biweekly)

The Breakdown

💸 First Paycheck Decoder

Your Info

Where Your Money Goes — Annual

Per Paycheck (biweekly)

The Breakdown