The Earn principle is about more than the amount you are paid through work. This principle is about knowing the fine print and details about your paycheck, including deductions and withholdings. To put it another way: In order to make the most of what you earn, it helps to understand your pay and benefits.
Actions You Can Take
- Learn about the details of your paycheck, including any deductions
- Review the taxes that are withheld, including Social Security and Medicare taxes
- Explore and sign up for workplace benefits
- Invest in your future – with education and training.
Hints and Tips
- Remember, your employer has to subtract certain taxes and other items from your wages every pay period. Your take-home pay (net income) is what you receive after any taxes and deductions are subtracted.
- Usually, your deductions and withholdings include federal, state and city income taxes, Social Security and Medicare taxes, your contributions for retirement savings, and payments for health insurance provided as part of your job.
- Be sure you take advantage of all the credits and deductions that help lower your taxes.
- It’s a good idea to sign up if your employer offers a retirement savings program. If so, you can arrange to have retirement savings automatically moved from your paycheck to a retirement account. Many employers will match part of every dollar you save this way, and you will benefit from it when you retire.