Lesson 1 of 5

What actually comes out of your paycheck

Your paycheck goes through several deductions before it reaches your bank account, and most of them are the same every pay period once your situation is set. Federal and state income tax withholding is the largest for most people, based on the W-4 you filed and your income level. FICA taxes -- Social Security and Medicare -- come out at a fixed 7.65% combined, with no way to opt out. Then come your elected deductions: health insurance premiums, 401(k) or retirement contributions, HSA/FSA contributions, and anything else you signed up for during open enrollment. None of this is random, which means it's also predictable -- your take-home pay this period should be very close to last period's, minus any changes you made. If it swings unexpectedly, that's worth checking (a benefits change, a tax withholding adjustment, a raise that didn't show up the way you expected). The next lesson covers the one number that actually matters for budgeting: your net, not your gross.