InTouch Credit Unio n
News For Teens
Fourth Quarter 2016 Newsletter
Gross vs. Net Pay: Do You Know The Difference?
that your check or direct deposit amount is actually
lower than where it started!
Between federal and social security taxes and
other expenses, your gross pay is lowered to what
is called your net pay, or take-home pay. After
those deductions are made, that $500 gross pay
you started with is now something less than that.
But the good news is your net pay is yours. Once
those deductions and the money you’ve set aside
for savings, as well as other budgeted expenses,
are accounted for, you can choose how to use
your remaining pay on fun things, like new clothes,
concert tickets or a burger at your favorite hangout,
catching up with friends.
(Don’t forget to occasionally take a closer look at
your paycheck and expenses. Challenge yourself to
figure out how to save a few extra dollars here and
there to save for later!)
Your first part-time job is a series of new learning
opportunities, and one of the most important involves
your paycheck. You probably know how far it will go
at your favorite restaurant or mall, but do you know
the difference between gross and net pay?
Each paycheck you earn can be broken down into
gross and net pay. Gross pay is the total number
of dollars you earn per paycheck. If your salary, or
hourly wage multiplied by the total number of hours
worked, equals $500 a month, that’s your gross pay.
However, if you take a closer look at it, you’ll discover
Working for you and your financial well-being.
ITCU is federally insured by the National Credit Union Administration.
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