You’ve dreamed about this day…the magical one when you receive your first paycheck from your first “real” full-time job. Hopefully, you were practical about it, too, so you know how much money you’ll make per pay period (or close to it). But even the most prepared earner can be caught off guard when that first direct deposit hits.
How do paychecks work? Here are the most common questions you might have about your first paycheck, answered.
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When will I receive my first paycheck?
When and how often you’ll get paid are questions for your company’s human resources department, or the person you spoke with when you signed your offer letter. They can let you know when each pay period ends—typically weekly, bi-weekly, bi-monthly, or monthly—and when you can expect to get that first paycheck and all subsequent ones.
What amount of money will my first paycheck be?
The amount on your first paycheck will reflect your total gross earnings for that pay period, minus deductions like income taxes and social security (more on that below). So don’t be surprised when your check doesn’t follow the equation of hourly pay times hours worked, or your annual salary divided by the days or weeks you’ve logged since you started.
That number is your gross pay alone. If you’re paid $15 an hour and work for 20 hours a week, your gross pay will be $300. Or perhaps you’re salaried, and your gross pay is a flat number like $500 a week or $54,000 a year. When in doubt, revisit your job offer contract to find the number.
While they might sound great in theory, your gross wages are not an amount you should be counting on to budget your life. But knowing your gross pay is important for moments like when you need to fill in forms for rentals, mortgages, and other big or legal-heavy purchases.
What gets deducted from my first paycheck?
Mandatory deductions from everyone’s paycheck include:
- Social security taxes
- Medicare
- Federal tax withholding
- State tax (your state of residence and/or the state you work in or your company is located)
- Locality tax (not always included)
If you signed up for your company’s health insurance, you’ll notice they take a portion out of your paycheck to pay for the vision, dental, and medical plans you agreed to.
Other things you might see deducted, if you opted in at the onset of your new job, include contributions for life and disability insurance, flexible savings accounts (FSA) or health savings accounts (HSA), 401K or retirement account, and commuter or parking benefits.
How can I calculate my take-home pay for my first paycheck?
Your take-home or net pay represents your gross earnings with taxes subtracted. You should also factor health insurance and 401K into that calculus, since it’s money you likely need to spend and won’t be touching or using for other expenses.
That said, it’s not so simple to figure out if you don’t know your state or local tax situation. Several reliable sources provide calculators that do the math for you, including ADP, QuickBooks, and the IRS for federal taxes.
Take-home pay isn’t always an accurate reflection of your financial situation, either. Maybe some of your income needs to go toward housing or childcare—things you can’t compromise on or always pay for each month or year. What you’ll really want to know, to get a firm grasp on your spending and savings abilities, is your discretionary income—more on what that is and how to define it here.
What about bonuses?
Bonuses are discretionary, and even if an employer offers them, there are almost always stipulations—and rarely a guarantee they’ll come to fruition. You’ll want to read your contract carefully to understand when bonuses might be paid out and what the amount might come out to, if you qualify for them under your company’s guidelines.
For example, many jobs offer bonuses annually, but that doesn’t mean they’re always given out in December. Even if they are, they might not show up in your paycheck for a couple pay periods. If you’re waiting on a bonus or unsure how the structure works, talk to HR—ideally before you sign on the dotted line.
Bonuses are taxed as supplemental wages, so prepare yourself, too, for a larger chunk to be taken out of them than what’s deducted from your salary or hourly wages.
Why is my first paycheck so low?
Your first paycheck might be lower than you expected because you were expecting the number you calculated for gross income. In that case, do some mental (or physical) math per the above advice to get your actual take-home pay number.
It might also be low because you signed up for an insurance or retirement benefit through your company. Even if your employer pays for some or a majority of the costs, you’re probably covering the rest, and that’s automatically taken out of your paycheck.
Finally, your paycheck could be a small amount because you only worked for a portion of the entire pay period. Maybe it started on a Monday but your first day was on a Thursday—you’re not going to be paid for those first few days because you didn’t actually work during them.
How will my first paycheck be paid out?
So, how do you get paid? Paychecks are typically handed out via a check in the mail or in person, or through direct deposit, which allows companies to send money directly to a bank savings or checking account (or split your paycheck between multiple accounts). You should be able to find your first pay stub and all subsequent ones through your employer’s HR portal or via an internal representative.
To sign up for direct deposit—and save yourself the hassle of having to run to your local branch to cash a check on the reg—you’ll likely need to provide your accounting department with information such as your bank, account’s routing number and account number, and personal details like your name, address, and contact information.
Many employees will need to do some of the legwork to get their paycheck paid out, such as fill out and submit a timecard to their manager or HR daily, weekly, or monthly clarifying when they worked and if they clocked any overtime.
How long does direct deposit take the first time?
Setting up direct deposit is often a quick and easy process if you follow your HR team’s directions. How long the money takes to hit your bank account, however, can vary depending on your company’s pay cycles and your bank, taking anywhere from a few days to a few weeks.
Even if you sign up for direct deposit right at the beginning of your new job, it may take a couple pay periods for your employer to stop sending you paper checks and start depositing the money into your account instead.
Banks are also at the mercy of holidays and weekend hours, so any requests made then can experience delays. Visit your bank’s website or customer service, or talk to your accounting department, if you run into issues with receiving your paycheck via direct deposit.
What should I do with my first paycheck?
After getting your first paycheck, you’ll initially want to double-check that the wage and hours worked on your pay stub are correct. If you see any problems, talk to your human resources representative. They’ll be able to help you decipher what you’re seeing—and correct inaccuracies, if necessary.
In future weeks when you get paid, you’ll see both the deductions from your current paycheck and the cumulative amounts of all the deductions. For instance, in each subsequent paycheck you’ll see your federal tax withholdings add up to a bigger number.
You’ll want to keep an eye on that as the year closes so you can ensure the W-2 your company issues you—that’s the tax form you’ll need to do your income taxes—accurately matches the amount. You’ll also need to monitor your paychecks every time you adjust your retirement, health, or commuter benefits, as the numbers may shift.
How you use your first paycheck, of course, is up to you. You can deposit it into a bank account if you don’t have direct deposit, or cash it out to have money on hand. You can start saving it, factor it into your budget, invest it, or spend it on necessities or luxuries. For advice on how to manage your personal finances like a pro, you can check out:
What do I do if my first paycheck is wrong?
Your HR representative, an outsourced contact, or worst case, your manager are the best people to contact if your first paycheck doesn’t reflect the right pay period, use the right salary, include the right deductions, or arrive on time or at all; spells your name or contact information wrong; or comes with any other issues.
Payroll should rectify it in a timely manner, or at the very least give you updates on where they are in the process of completing your request. The sooner you address an issue, the quicker it can get resolved.
Can I claim unemployment if I received my first paycheck?
Rules around unemployment benefits differ by state, but you typically qualify if you can’t work due to no fault of your own—you were laid off or your role was eliminated, for example. Visit your state’s .gov website for information on whether you’re able to apply for and receive unemployment if you got your first paycheck but then lost your job.
What does “lag” mean?
A one-week or two-week lag means you are paid one or two weeks after a pay period is completed. This is a common payroll tactic for some government positions and when an employee leaves, meaning your first paycheck may not arrive immediately after your first pay cycle is completed.
Will I get my first paycheck if I quit?
Federal law doesn’t force employers to pay workers immediately after they leave a role, but some state laws do, so best to check your state’s portal for more information. But typically, companies pay an employee’s “last paycheck”—their wages for their final days on the job—on the same pay cycle as before.
So if you were paid on Fridays and quit on a Tuesday, you’ll probably receive your final payment the next Friday—unless HR otherwise specifies in your offboarding contract and materials.
That’s the whole rundown of your paycheck. Now, onto the fun stuff: Once you’ve gotten that check, what will you do with it?
Alyse Maguire contributed to the latest version of this article.