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)
Key vocabulary
- W-4
- A form you give your employer that tells them how much federal income tax to withhold from each paycheck.
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. Answers:
- Why? — B. Taxes like Social Security, Medicare, and income tax withholding were taken out first.
- How many paychecks will you get in a year? — C. 26
- The W-4 form tells your employer how much federal income tax to withhold from your pay. — True
- 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?
Answer: Gross is what you earned; net is what you take home after taxes and other deductions.
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.