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Earning your own money

Lesson 34 · Written for kid, teen, and little

Gross Pay vs Net Pay

Gross pay is what you earned, net pay is what actually reaches you after taxes.

The idea

Gross pay is everything you earned before anything is taken out, like your hours times your hourly rate. Net pay, sometimes called take-home pay, is what is left after deductions and it is the number that reaches your bank account. In the U.S., employers generally withhold taxes from paychecks and send that money in for you, which is why gross and net pay often differ. Your payslip lists each subtraction by name, so you can trace gross pay down to net pay and check that it adds up. 🧾

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Words to know

5

Gross pay

All the money you earned before anything is taken out. Work 10 hours at $15 an hour and your gross pay is $150.

Net pay

The money that actually reaches you after everything is taken out. That $150 of gross pay might land as about $130.

Withholding

Tax money your employer takes out of your pay and sends to the government for you. It is why a $300 paycheck arrives as about $255.

Deduction

Any amount subtracted from your pay, like taxes or health insurance.

FICA

The Social Security and Medicare taxes taken out of most paychecks. It is the line on your payslip that is not income tax.

Try it — no accountSort into groups

Some money comes out of your paycheck automatically, before it ever reaches you. Other money you choose to spend after payday.

Sort each one.

0 / 6 sorted

In the full lesson

  1. 1Sort into groups
  2. 2Put it in order
  3. 3Make the call

Vine has 107 lessons like this one, each written three ways so a 7-year-old and a 17-year-old both get a version that fits.

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