Your Paycheck
Once you start working, you’ll get a paycheck. Most employers pay their employees twice a month, or every other week.
Understanding Your Paycheck
Your paycheck may not actually be for as much money as you might expect. For example, if you are paid $15 an hour and work 40 hours a week for 2 weeks, you might expect to get a check for $1,200. However, a lot of things called deductions can make your actual check smaller. Your paycheck may include deductions for:
- Social Security taxes
- Income taxes
- Retirement plans
- Your portion of a health care insurance premium.
All of these are actually good things. Social Security taxes will help you pay for your retirement or will give you Social Security Disability Insurance (SSDI) if your disability gets worse. Income taxes are used by your community to support public works. Paying into a retirement plan means that when you retire, you’ll be able to use that money for your expenses. Health care insurance means your medical expenses will be affordable.
Once you get a job, you should file your taxes every year. Most people do this in March or April. The deadline to file your taxes is April 15th. If you file your taxes, you might not have to pay anything because what you owed was already deducted automatically from your paycheck. Often, the government actually sends you a check if too much money was taken out of your paycheck for taxes! This is called a refund.
You might also qualify for the Earned Income Tax Credit (EITC). It helps people with low incomes. Thanks to the EITC, you might get an even bigger check from the government. For more information, see the website of the Internal Revenue Service (IRS) or call 1-800-829-1040 or 1-800-829-4059 (TDD).
Open a Bank Account and Deposit Your Paycheck
In the past, you may have paid for everything with cash and did not see a need to open a bank account. However, once you get a job, a bank account can make your life much easier and safer.
There are a few major reasons why it is important to get a bank account when you have a job:
- You now have more money than you’ve had before and need a place to keep it.
- You can have your check deposited automatically through direct deposit.
- You can get a checking account and pay your bills.
Unfortunately, many large banks charge monthly fees. However, many small banks and credit unions offer accounts with no fees. You should never pay monthly fees for having a bank account. Make sure to compare the fees at different banks and if you are currently being charged a fee for your account, you can switch banks!
Instead of taking their paychecks to the bank, some people go to check-cashing stores. You can give your checks to these stores and they’ll give you cash, but they charge high fees. For example, if you give them a $100 check, you may pay $8 to have your check cashed. So, instead of getting $100 in cash, you will only get $92. However, if you take your check to your bank, you won’t be charged anything.
A lot of check-cashing stores are also payday lenders. Many people who are short on cash choose to get payday loans, which are small amounts of money that are paid back when you get your paycheck or benefits check. The problem is that the interest rates for payday loans are incredibly high, up to 400% per year!
Open a bank account and avoid check-cashing stores and payday lenders. That way you can save up more money for the things you want and need.
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Get Expert Help
Ask an Arizona Work Incentive Consultant your questions about work and benefits.
1-866-304-WORK (9675)
A Work Incentive Consultant is a trained expert who can help you understand Social Security work incentives, disability benefit programs, and how they are impacted by work. Their goal is to help you transition to work and make a sustainable financial plan for your future.
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