Paycheck terms you need to know

Your glossary of paycheck terms.

If you’re getting your first paycheck, you may be unfamiliar with the financial jargon that’s printed alongside your payment details. Here are some basic terms to know.

  • Paycheck: A bank check given to an employee with a sum based on their wage or salary.
  • Direct deposit: Instead of receiving a physical check or cash, you could have the option of having the amount automatically transferred into your bank account. You need to set this up with your employer, which typically includes providing your bank account information.
  • Gross pay: The total amount of money earned prior to taxes and other deductions.
  • Net pay: The amount of money earned after taxes and other deductions. Deductions can include: federal and state income taxes, Medicare taxes, and Social Security taxes.
  • Tax withholdings: A portion of a paycheck that is deducted by the employer and given directly to the government. The amount withheld is based on an employee’s IRS Form W-4.

Want to read more about figuring out your paycheck?

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