My Pay...M.I.A.?

Getting Paid

It’s here! Your first payday! Blood, sweat, and tears have been shed in order to receive the much-anticipated paycheck. Your boss hands you the envelope. You open it and look at the check worth…what?! That can’t be right! You very carefully calculated how many hours you worked and how much your check would be worth. This check is written for much less. Where is the rest of your money? Missing in action? This can’t be legit…

The paycheck worth less than what you thought is legit! This is due to payroll withholdings, such as taxes, which are deducted from your pay.

Net Income vs. Gross Income

The actual amount that you get paid is known as your net income. Net income is the amount of money left after all deductions have been withheld from your pay. Net income is also known as “take home pay.”

Gross income is the total amount of money earned before deductions are withheld. Gross income is more than net income, but you don’t get to keep the amount of your gross income due to mandatory payroll deductions, such as federal income tax.

So, how can I figure out what my gross income is? No matter how you are paid, you will always receive a paycheck stub that outlines your paycheck deductions. Your gross income can be found on the paycheck stub, along with a detailed outline of the deductions made in order to calculate your net income. Your net income is the amount of the paycheck and is also indicated on the paycheck stub.