When Do You Get Your First Paycheck? Explained
By Indeed Editorial Team
Updated February 22, 2021 | Published January 5, 2021
Updated February 22, 2021
Published January 5, 2021
When starting a new job, it is common for your first paycheck to come a little later on in your employer's payroll schedule. This can be because of a lag between your first workday and the next pay period. However, knowing when you will get that first paycheck is an important part of creating your budget and planning for immediate expenses, so it's no surprise many employees like to know when to expect their first paychecks. In this article, we answer, "When do you get your first paycheck?" so you can understand when and how to plan according to your income cycle.
When do you get your first paycheck?
The date of your first paycheck will ultimately depend on your company's payroll schedule. Companies will typically have a specific payroll schedule, such as weekly, biweekly, monthly or on set days of the month. For instance, some companies' payroll schedules set payment dates on the 1st and 15th of the month, or the closest business day prior if these dates land on a weekend or holiday.
Typically, companies issue paychecks on the last day of a pay period. Depending on your start date, you may expect your first paycheck at the end of the first full pay period that you work. For example, if you start working on the first day at the start of a new pay period, you can expect your first paycheck at the end of the pay period that your employer schedules.
If you start in the middle of a pay period, however, you may not receive your first paycheck until the end of the following pay cycle. In this case, you would work a full pay cycle plus the days in the middle of the cycle you worked before you receive your first paycheck.
What form of payment will you receive?
The way your employer pays you will also depend on what the company provides. For instance, many companies use direct deposit to pay employees, where payment appears instantly on the pay date in employees' bank accounts. This method of payment may take several minutes or several days to set up, depending on your company's policies and onboarding processes. Many employers also issue paper checks, where you'll receive a physical check to deposit into your bank account.
Additionally, each form of payment has its advantages and drawbacks that are worth considering when choosing your preferred method of receiving your income. If your employer offers both direct deposit and paper checks as forms of payment, think about the following factors to determine which is the best option for your income needs:
Direct deposit is often quicker than paper check payments, especially if you have to wait until the next business day to deposit your paycheck.
Direct deposit is time sensitive. This means if your employer doesn't have you set up for this payment method by the current pay period's reporting deadline, you'll receive a paper check the first time.
Direct deposit is highly secure and less easily lost or misplaced than paper checks.
When you start your job, you will learn about the payment process and setting up your preferred method of payment during your orientation. If you have questions about how or when your employer will pay you, it's important to reach out to your company's human resources department. They can make sure you have all the information you need.
How much money to expect in your paycheck
When adjusting your budget based on your new job, remember that you have to pay taxes each pay period. The amount of money in your paycheck will depend on how much you pay in local, state and federal taxes. When you start your job, you'll fill out and turn in a W-4 tax form to your employer to establish how much you'll pay in income taxes.
Additionally, if you receive employee benefits through your employer, you will deduct these from your paycheck as well. The most common employee benefits that you can expect to deduct from your gross income are medical and retirement benefits if these are available through your employer.
How to calculate your take-home pay
Follow these steps to calculate how much money you'll take home each paycheck:
1. Find your gross income
The income you receive before any tax and benefit deductions is your gross income. This is always included in your pay stub, and is typically the stated salary in your employee contract. Your gross income is the amount you'll subtract your taxes and benefits from. For example, if you receive an hourly income of $25 per hour and work a 40-hour workweek, your gross income for a week would be $1,000.
2. Subtract your tax deductions from your gross income
Your income taxes will include deductions to FICA, which includes your Medicare and Social Security taxes. Typically, companies pay half of the FICA taxes at a 7.65% rate and employees pay the remaining 7.65%. So if your gross income is $1,000 per week and your employer pays you on a weekly basis, you would deduct 7.65% of $1,000 from your income. To do this, multiply 7.65% by $1,000 and subtract this result from your gross pay: (7.65%) x ($1,000) = $76.50 and ($1,000) - ($76.50) = $923.50.
3. Subtract health benefits
If you have health insurance benefits through your employer, you'll subtract this from your gross pay along with your taxes. The amount you'll deduct for employee health benefits will depend on the payment amount of the insurance policy you chose when you started your job. Usually, this amount will be a monthly premium. Using the previous example of $923.50 in income after taxes, assume an insurance policy has a monthly premium of $150. With four full weeks in a month, you can divide $150 by four and subtract the result from your weekly pay: ($923.50) - ($37.50) = $886.
4. Subtract retirement benefits
If you have retirement benefits—like a 401(k)—along with health insurance benefits, this will also come out of your gross pay. With a 401(k), you'll typically pay a certain percentage of your gross income that you'll contribute each pay period. So if you set your contribution rate to 3%, you'll deduct this amount from your gross pay along with taxes and your other benefits. For instance, multiply a contribution rate of 3% by the previous example gross income of $1,000 will result in a weekly contribution of $30. Subtract $30 from $886 to get the final net income amount.
5. Use your net pay to manage your budget
The final amount you get after subtracting all of your taxes and benefits from your gross income will be your net income. You can usually expect to be calculating the same deductions each pay period, and this information will help you plan for expenses and set a budget.
Browse more articles
- How Much Does a Nurse Practitioner Make?
- Job Cast: Money Matters
- How Much Do Accountants Make?
- How Much Does a Social Worker Make? Top Social Service Salaries By State
- How Much Does a Physician Assistant Make?
- FAQ: How Much Do Finance Majors Make? (Plus 8 Jobs To Explore)
- How Much Do Human Resource Managers Make?
- Highest-Paying Degree Fields
- 14 High-Paying Jobs in Information Security (With Salary Info)
- What Does It Mean To Be Laid Off?
- A Guide to Pediatric Nurse Practitioner Salary
- FAQ: How Much Does a Psychology Ph.D. Make?