When you’re in the throes of a new job, the experience can bring both excitement and apprehension. But one of the best parts of any new job is the opportunity to receive that first paycheck. As a new hire, you’ll want to know when it’s hitting your checking account, and what factors will impact the net amount. When you clarify the details of payroll, that first paycheck will be less of a surprise.
Keep reading to learn what every new hire needs to know about their first paycheck!
Understand When You’ll Be Paid
What does the payment schedule look like at your new job? Businesses generally use a set pay period to send out payments to employees. What that schedule looks like can have a direct impact on your budgeting habits. Maybe you’ll receive a paycheck once a month. Or maybe you’ll receive a paycheck midway through the month and on the last day of the month. This is referred to as a semimonthly schedule. Some companies prefer to pay every other Friday, while others will pay on a weekly schedule.
As a new employee, you may experience a small delay in receiving your first paycheck. Sometimes, this can translate to a paycheck that is a week or two late. Some companies may not do this, however, and simply provide you with a partial paycheck during the first cycle. In any case, it pays to be clear on the payment timetable. It’s fair to ask HR what the schedule looks like and whether you can expect a delay.
Know What Factors into Net Pay
A company can create pay stubs instantly that offer a breakdown of your paycheck. While you may have been happy to get a pay bump with your new job, the actual payment amount on your paycheck likely will be smaller. This is due to withholdings that cut into your gross pay. Common withholdings include federal, state, and local income tax. And you may have deductions due to Social Security.
Voluntary deductions include contributions to health insurance and retirement accounts. If you change how much you put into a company-sponsored 401(k), that will impact your take-home pay. Understand that your gross pay is the number that connects to your annual salary or hourly rate. It does not reflect deductions. Your net pay, by contrast, reflects those deductions.
Consider Other Factors Impacting Paychecks
When you just start a job, it’s unlikely you’ll be taking on overtime hours or paid time off (PTO) right away. But once you’re established in your role, you can anticipate different factors affecting your normal pay amount. Hourly positions may come with opportunities for overtime pay, for example. This is normally paid at time-and-a-half, so it can really boost your paycheck.
Other factors that can impact pay include PTO, holiday pay, and salary recalibrations. If your company offers bonuses for performance or other reasons, that can nudge your paycheck higher. Vacation pay or PTO can result in extra dollars, too. You may have to wait to accrue this, though, before seeing it reflected on a check. And if your company conducts a study to evaluate their salaries, that may result in a higher salary that shifts your payment amount favorably. Your HR representatives should be able to answer questions about any shifts in your paycheck totals.
Be Clear About Benefits and Deductions
Don’t assume that your benefits coverage starts when your job does. In some scenarios, there may be a waiting period of a month or longer before benefits kick in. You may need temporary coverage to fill the gap. And your first paycheck may not reflect deductions for healthcare coverage.
After your benefits officially start, you’ll see deductions for health insurance. You may see deductions for vision or dental coverage, too, if you opted for those plans. Retirement plan contributions and life insurance coverage deductions may be delayed, as well. Just be aware that the take-home pay from your first paycheck may be higher than that of the next paycheck.
Use Direct Deposit
Many companies use direct deposit to pay employees. Rather than using physical checks, which can take longer to process and receive, direct deposit enables companies to send your earnings directly to your bank. You’ll need to disclose your preferred bank account’s details, including its routing and account numbers, to your HR representative when you start.
Direct deposit is more convenient for both employers and employees. And it’s one less thing for you to worry about when you’re planning your budget. Instead, you can rest assured that your earnings are safely in your bank account.
Pay Attention to Your Paycheck
Receiving your first paycheck can be an exciting moment. But it helps to understand what to expect before you receive it. Touch base with an HR representative so you can know when benefits kick in, and when you’ll see deductions in your paycheck. Ask about overtime pay or other benefits, like retirement account contributions. And learn to read the different numbers on your paycheck so you can anticipate your take home pay more easily. You’ll be able to track your payments and feel more confident about your finances.
