Understanding Your Paycheck Stub
A worksheet for 7th graders to learn how to read and understand the components of a paycheck stub, including gross pay, deductions, and net pay.
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Understanding Your Paycheck Stub
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Read the information below about paycheck stubs. Then, answer the questions that follow.
What is a Paycheck Stub?
When you start working, you will receive a paycheck for the work you do. Along with your paycheck, you'll get a paycheck stub. This document shows you how your pay was calculated. It's important to understand your paycheck stub to ensure you are paid correctly and to see where your money goes.
Key terms on a paycheck stub include:
1. **Gross Pay:** This is the total amount of money you earned before any deductions are taken out.
2. **Deductions:** These are amounts subtracted from your gross pay. Common deductions include federal income tax, state income tax, Social Security, Medicare, and sometimes health insurance or retirement contributions.
3. **Net Pay (Take-Home Pay):** This is the amount of money you actually receive after all deductions have been taken from your gross pay.
1. What is 'Gross Pay' on a paycheck stub?
The money you get after taxes
The total money earned before deductions
Money paid for health insurance
Money saved for retirement
2. Which of the following is NOT typically a deduction from your paycheck?
Federal Income Tax
Social Security
Rent Payment
Medicare
1. The money you actually receive after all deductions is called .
2. Amounts subtracted from your gross pay are known as .
3. Federal income tax and state income tax are types of .
1. Your net pay is always higher than your gross pay.
True
False
1. Explain why it is important to understand your paycheck stub.