What your teen should know about getting their first paycheck.
Key takeaways:
- First paychecks can come with surprises. Paychecks can be smaller than expected because taxes and other withholdings are taken out, making it important for teens to understand how their pay is calculated before they start spending.
- Learning how to read a pay stub builds financial confidence. Reviewing each pay stub helps teens understand their earnings, confirm hours worked, and spot any errors — building early habits of financial responsibility.
- Paychecks are an opportunity to build smart money habits. Opening a checking account, setting up direct deposit, and saving even a small portion of each paycheck can help teens develop healthy money habits that support long-term financial success.
Getting your first paycheck from a part-time job is a milestone and a big step toward adulthood.
But for many, that moment also comes with a surprise: the amount can be smaller than expected. That’s why it’s important to teach your teens the basics of how paychecks work and what to expect before they cash in.
What is a pay stub?
A teen with their first job may not know that employers give employees a document called a pay stub at the end of each pay period that breaks down their earnings. This pay stub will often be digital, but could be provided on paper.
A typical pay stub will show:
- Basic identifying information, such as name, social security number and employee ID number
- The date the payment is issued
- The pay period for the paycheck (paychecks often come a week or two after the pay period ends)
- Gross income (amount earned before deductions)
- Net income (amount you’re receiving after deductions
- Year-to-date (YTD) income
- Deductions from the current paycheck and year-to-date deductions
The Consumer Protection Finance Bureau (CFPB) pdf opens in a new windowfootnote [PDF] has a document that goes into more detail about other things your paycheck shows and what it means.
It’s a good idea to encourage your teen to get into the habit of reviewing their pay stub each pay period.
“It’s important to create a habit of checking your pay stub each time to ensure the information for that payroll is correct and to build financial responsibility,” says Ashley Wyer, senior regional retail sales and experience manager, Commerce Bank.
That might include a review of:
- Total hours worked in a pay period
- Vacation, PTO, other personal time, tips, etc.
- Deductions
What is being deducted from a paycheck?
Whether your teen is working full-time or part-time, deductions will be taken out of their paycheck. It’s important they know these deductions include taxes, insurance premiums, and any other programs they are participating in.
According to the CFPB, typical paycheck deductions include:
- Federal tax – Money withheld to avoid paying a large tax bill when an annual income tax return is filed.
- Federal Insurance Contributions Act (FICA) Social Security (SS) tax – Money withheld by the employer to pay the employee’s Social Security tax.
- FICA Medicare – Money withheld by the employer to pay the employee’s Medicare tax.
- State tax – Money withheld by the employer to pay the employee’s state income tax.
These taxes aren’t the only deductions that could appear on a paycheck.
“Deductions that appear on your pay stub can depend on your employer. Some will offer health insurance and benefits to part-time employees that work 20 hours a week,” according to Wyer.
Paycheck questions parents should encourage teens to ask their employer:
Every employer handles pay differently and asking a few simple questions at hire makes expectations clearer. Parents can help teens prepare for these questions early, so they are aware when their first paycheck arrives.
- How long are paid periods?
- Is there a delay between the end of a pay period and receiving the paycheck?
- When will the first paycheck be given?
- How do I set up direct deposit?
Keep in mind, if your teen begins working in the middle of a pay period, their paycheck may be delayed until the end of the next pay period.
What to do with a paycheck.
Before your teen receives their first paycheck, help them open a checking account. This gives them a safe place to deposit their money and easy access through a debit card for everyday purchases.
If your teen is under 18, a parent or guardian will need to be a co owner on the account. If they’re 18 or older, consider talking with them about adding you as an authorized user. That way, they can start building financial independence while still benefiting from guidance and support as they learn to manage their money.
Many banks, including Commerce, offer checking account options designed for students and first time earners, helping teens build smart money habits from the start.
Explore student banking for your teen.
Once they’ve opened a checking account, tell your teen to work with their employer to set up direct deposit. This means their paycheck will be deposited into their checking account without the need to pick up a paper check and take it to their bank.
It’s also a good idea to tell them to get into the habit of saving a portion of their paycheck in a savings account. Even putting a small amount into the account can add up over time and be helpful when they run into unexpected expenses.
Work together to manage your teen’s money.
As your teen starts earning, each paycheck becomes a chance to build healthy financial habits. In the beginning, work together to review pay stubs and financial accounts.
Turning paychecks into a practical money lesson at home and learning about real-life money options can help set them up for future financial success.
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