Dinero Teens: Taxes 101 for Your First Job
If your first job is with a company—like working at a retail store, a restaurant, or an office—you'll notice that your paycheck isn't as big as you thought it would be.
Getting your first "real" job is an exciting step toward independence. You're earning your own money, building responsibility, and maybe even saving for big goals like college, a car, or a dream vacation. But there's one thing you might not be expecting: taxes.
If your first job is with a company—like working at a retail store, a restaurant, or an office—you'll notice that your paycheck isn't as big as you thought it would be. That's because taxes and Social Security are taken out of your earnings. It's a significant change from the jobs you might have done when you were younger, like babysitting, mowing lawns, or pet-sitting, where you likely got paid in cash and kept 100% of what you earned.
Here's what you need to know about taxes, Social Security, and what happens to your paycheck.
When you start working for a company, they're required by law to withhold part of your paycheck for taxes. You will also contribute to Social Security and Medicare, which are programs that help retired people and those with disabilities. Both of these are known as deductions.
When you are looking at your pay check you will see the Gross Pay listed which is the amount you earned before taxes and net pay is the amount you take home after deductions.
