Lesson plan · Money After High School · Lesson 1
Understanding Your Paycheck
Gross vs. net pay, pay stubs, and the W-4.
- 45 minutes
- Grades 9–12
- Beginner
- Activity: pairs
Objectives
Students will be able to:
- Distinguish gross pay from net (take-home) pay
- Calculate Social Security and Medicare withholding
- Read a pay stub and explain what the W-4 does
Materials
- Slide deck and a projector
- Worksheet (one per student)
- Paycheck Calculator (projected, or on student devices)
- Exit ticket slips (bottom of the worksheet)
Standards
- National Standards for Personal Financial Education (2021)
- Earning Income
- Texas TEKS §113.76 Personal Financial Literacy and Economics
- (4) The student recognizes that a variety of factors influence income.
Topic-level alignment by FLC. How we map standards
Key vocabulary
- W-4
- A form you give your employer that tells them how much federal income tax to withhold from each paycheck.
Background reading
The official sources this lesson is based on.
45-minute agenda
0–5 min
Warm-up
Post: “You work 20 hours at $15 an hour. How much will your paycheck be? Guess before we calculate.”
Teacher note: Gross is $300, but the check will be less after taxes. Social Security and Medicare alone take 7.65% ($22.95).
5–12 min
Direct instruction
Present the lesson slides. Make sure students leave with these points:
- Gross = earned. Net = take-home.
- FICA = Social Security 6.2% + Medicare 1.45%.
- The W-4 sets your federal withholding.
- Biweekly = 26 paychecks; semimonthly = 24.
- Check your pay stub.
Use the “See it” slide (A first paycheck: 40 hours at $13) to make the idea visual.
12–17 min
Worked example
Walk through “Jordan's first paycheck surprise” on the slides. Pause before the result and ask students to predict it.
17–22 min
Live demo
Project paycheck calculator from the slides or the Paycheck Calculator. Change one input at a time and have students call out what they think will happen.
22–32 min
Stub Detective
Format: pairs · 10 minutes
- Post a made-up pay stub: 40 hours at $14 an hour, federal income tax withheld $38, no state income tax.
- Pairs calculate gross pay, Social Security (6.2%), Medicare (1.45%), and net pay.
- Pairs find what percent of gross pay they actually took home.
- Discuss: what would change if they adjusted their W-4?
What to look for: Gross $560.00; Social Security $34.72; Medicare $8.12; federal $38.00; net $479.16 — about 86% of gross. The W-4 changes the federal withholding line.
32–37 min
Check for understanding
Use the question slides — or run them as a Four Corners game. Questions:
- Why?
- How many paychecks will you get in a year?
- The W-4 form tells your employer how much federal income tax to withhold from your pay.
37–42 min
Discussion
- What would you do if your paycheck showed fewer hours than you worked?
- Why do you think taxes are taken out of each paycheck instead of paid once a year?
42–45 min
Exit ticket
Prompt: What's the difference between gross pay and net pay?
Differentiation
Common misconception
“My hourly wage times my hours is what I'll get.” That's gross pay — taxes and deductions come out first.
Support
Give pairs a labeled pay stub with each deduction line highlighted.
Extension
Explain why someone paid semimonthly (24 checks) gets a slightly bigger paycheck than someone paid biweekly (26 checks) with the same salary.
Homework or make-up work
Students can complete the full interactive lesson — including its knowledge check — at learnwithflc.org/courses/money-after-high-school/paychecks. No account needed; progress saves on their device.