Where’s the rest of my money?
Explanation of deductions from one’s paycheck; details of where one’s money goes.
When you receive a paycheck, don’t you think the amount on the check will be the total hours you worked multiplied by the amount you get paid per hour? I know I did. But then I learned about taxes and Social Security and deductions that are made according to the amount you earned.
I remember when I received the largest paycheck to date, it was for a little more than $200 and the government had taken almost $20. At that time I was angry because it was money I could have used to go to the movies and lunch with my friends; but now I see how miniscule that amount was compared to the amount I was getting. All of my paychecks have deductions but the amount varies depending how much I make each month.
Recently I received a paycheck for $14 and the government had taken out only $2. I started laughing because I thought that there was no point in the government taking $2 from me. I had gone to Pottery Barn for two hours to sit through a bridal meeting and I just wanted my $16.
Whenever I see the deductions that the government takes from my paycheck I get angry because it is my money. There are many times when I feel that I should not have to pay taxes because I am just a student and it is a part-time job. But I try to remember that the money that is deducted from my paycheck is going to the government. I try to stay positive and think that it is going to help people and benefit those who truly need it, such as the homeless, abused women and people in general who are less fortunate than others.
Mandatory deductions from your paycheck
Federal Income Tax
Funds services provided by the federal government, such as defense, human services and the monitoring and regulation of trade.
State Income Tax
Funds services provided by state government, such as roads, safety and health. (Not all states levy an income tax.)
Local Income Tax
Funds services provided by the city or other local government, such as schools, police, and fire protection. (Not all areas levy an income tax.)
Federal Insurance Contributions Act
(FICA) Social Security tax
Provides for old-age, survivors, disability insurance.
Medicare Tax
Provides for certain health care insurance.
Used with permission. Financial Fitness for Life: Bringing Home the Gold, copyright © 2001,
National Council on Economic Education, New York, NY. All rights reserved. For more information visit www.ncee.net or call 1-800-338-1192.
