Earn · Lesson 2 of 3

Where did my paycheck go? Taxes 101

Your first pay stub has two numbers that matter: what you earned, and what actually hit your account. The gap is taxes — and it’s completely normal.

1Learn

  1. Gross vs. netGross is what you earned before anything is taken out. Net (take-home) is what actually hits your account. Always budget with net — that’s the money you really have.
  2. W-2Arrives every January from your employer. It reports what you earned and what was withheld, so you (or a parent) can file your tax return by April 15.
  3. FICASocial Security (6.2%) + Medicare (1.45%) on every stub. Your employer matches it. Self-employed? You pay both halves — 15.3%.

2Try it Calculator

Gross → take-home

A rough ~15% teen estimate.

You take home about

$425

$500

A rough estimate for learning — real withholding varies by state and income. If you earn little in a year, you may get much of it back as a refund after filing.

Heads up: working “under the table” for unreported cash isn’t a loophole — all income is taxable, and not reporting it is tax evasion. Side-hustle income means setting aside ~25–30% for taxes.

3Check

Remember

The gap between what you earn and what you get is taxes. Plan around take-home pay, and file even when you earn a little — refunds only come if you file.

Quick check

Your gross paycheck is $400. Why might take-home be only about $340?