Your First Paycheck: Gross Pay, Net Pay and FICA (Grades 10 to 12)
Learning objectives
- Calculate gross pay from an hourly wage and hours worked.
- Explain FICA (Social Security 6.2% + Medicare 1.45%) and income tax withholding.
- Estimate net pay and set a savings amount before spending.
Materials
- A device with a browser, or calculators
- The free First Paycheck Calculator at /tools/first-paycheck/
- The sample pay stub table below
Lesson steps
- Hook (5 min): Ask: "You work 20 hours at $17. How much is your check?" Most students say $340. Reveal that the deposit will be less.
- Teach (10 min): Walk through the sample pay stub: gross pay, Social Security, Medicare, federal and state withholding, net pay. Mention the W-4 and that withholding varies by person and state.
- Calculate (15 min): In pairs, students enter three different jobs (wage and hours) into the calculator and record gross pay, FICA and estimated net pay.
- Budget (15 min): Using one result, students plan a monthly budget: savings first (at least 10%), then transportation, phone, food and fun.
- Exit ticket (5 min): "Name two things taken out of a paycheck and one reason it's smart to save before spending."
Sample pay stub (two-week pay period)
| Line | Amount |
|---|---|
| Hours: 40 at $17.00 | $680.00 |
| Social Security (6.2%) | -$42.16 |
| Medicare (1.45%) | -$9.86 |
| Federal income tax (example) | -$34.00 |
| State income tax (example) | -$13.60 |
| Net pay | $580.38 |
Federal and state amounts are examples only; real withholding depends on the W-4 and the state.
Standards
Aligns with the Jump$tart National Standards for Personal Financial Education (Earning Income) and the Council for Economic Education's National Standards for Personal Financial Education. Verify alignment against your own state standards.
Extension reading
For students and families who want more, Money: Master of Your Own Domain after High School by Oliver Mark covers these ideas in more depth.
Money: Master of Your Own Domain after High Schoolabout 2 hr 15 min
Teen & young adult personal finance · about 136 pages · by Oliver Mark
The guide to college, trade school and first-job life that nobody hands you at graduation.
📚 Read free with Kindle Unlimited (Kindle edition)
License
This lesson plan is by Mark Oliver Books and is licensed under Creative Commons Attribution 4.0 International (CC BY 4.0). You may copy, adapt and share it with attribution. The license covers this lesson page only, not the books.
For general education only, not personalized financial, tax, legal or investment advice. Numbers are estimates based on what you enter. The Money series is written by Oliver Mark, a former licensed stockbroker (Series 7 and 63).