Personal Finance · Gross vs. Net · Lesson Plan

Your First Paycheck: Gross vs. Net — Teacher Lesson Plan

A ready-to-teach lesson for the free Your First Paycheck game — students read a real pay stub, work out the payroll taxes that come out of every check, and find their take-home pay. The big idea: a paycheck is not what you earn — taxes come out first.

Grades 9–12 & Adult Lesson Plan + Interactive Activity 10–15 min game Free · No login

Download the printable lesson planPDF · 3 pages · free

For Teachers

Lesson at a glance

Topic: Personal Finance · Earning Income · Gross vs. Net Pay
Grade Level: Grades 9–12 & Adult Ed
Resource Type: Lesson Plan + Interactive Activity
Estimated Time: 10–15 min game; a 40–45 min session
Format: Whole-class demo, then individually or in pairs at devices
Cost: Free — students play from a free classroom account

What Students Learn

Learning objectives

Explain the difference between gross pay and net (take-home) pay
Compute the FICA payroll tax on a paycheck — Social Security (6.2%) plus Medicare (1.45%), 7.65% in all
Find net pay by subtracting every deduction from gross pay
Read a pay stub and locate gross pay, each deduction, and net pay
Tell which deductions are required by law (payroll and income taxes) and which are optional benefits (retirement, health insurance)

Standards

Standards aligned

Jump$tart: Employment & Income 2, 3
CEE: Earning Income 1, 3
Focus: analyzing the factors that affect net income (payroll and income taxes) and comparing gross compensation with take-home pay.

For Teachers

Before you teach

The activity is free and lives inside Money Instructor Classroom at classroom.moneyinstructor.com/interactive-lessons — a separate, privacy-first app from this website. Students open it from a signed-in student account (a class code, a username, and a PIN you hand out — no email needed). Every pay stub is simulated for practice.

Set up your class before this lesson (about five minutes):

Create a free class — a Bank-Only class is the simplest fit.
Add your students — a first name, initials, or a nickname is all you need (no full legal names).
Print sign-in slips — each student’s class code, username, and PIN.
To project the demo — sign in as a student on the classroom computer and open the game so the whole class can read one pay stub together.

About the numbers. The stubs use the real Social Security (6.2%) and Medicare (1.45%) payroll-tax rates, so the FICA math is exactly what students will see on an actual check. The federal and state income-tax lines are shown as realistic sample amounts — real withholding depends on each worker’s W-4 and tax bracket, which the companion lesson Taxes & Your W-4 explores. Every stub is biweekly (80 hours) and foots exactly: gross − deductions = net.

Download the printable lesson planPDF · 3 pages · free

Key Terms

Vocabulary

Gross pay: The full amount you earn before anything is taken out (hourly rate × hours, or salary ÷ pay periods).
Net pay (take-home): What is actually left — and deposited — after every deduction. Gross pay − deductions.
Deduction: Any amount taken out of a paycheck — taxes and optional benefits alike.
FICA / payroll tax: The Social Security + Medicare taxes every worker pays: 6.2% + 1.45% = 7.65% of gross.
Social Security: A required 6.2% payroll tax that funds retirement and disability benefits.
Medicare: A required 1.45% payroll tax that funds health coverage for people 65 and older.
Withholding: Money an employer holds back from each check to prepay your income taxes.
Income tax: Federal and (in most states) state tax withheld on what you earn.
Pay stub: The itemized record attached to a paycheck — earnings, deductions, and net pay.
Required vs. optional: Taxes are required by law; benefits like a 401(k) or health insurance are ones the worker chooses.

The Lesson

Lesson plan

Estimated time: one 40–45 minute session (the game itself is 10–15 minutes). Works as a full lesson or split across two shorter periods.

Lesson sequence

Warm-up (5 min). Ask: “A job pays $15 an hour and you work 80 hours over two weeks. How much money lands in your bank account?” Most students answer $1,200. Write it on the board — then tell them the real number is smaller, and today they will find out exactly why.
Model one pay stub (8 min). Project the game and read the first stub together. Point out gross pay at the top, walk down each deduction, and land on net pay at the bottom. Compute the FICA line live: gross × 7.65% (or 6.2% + 1.45%). Show that gross − all deductions = net.
Students play (12 min). Students open the game and work all ten questions on their own device or in pairs. The first three ask them to compute FICA, the next three to compute net pay, and the last four to read a full stub and judge it. Circulate and coach the percent math.
Immediate feedback (built in). The game checks each answer right away, keeps a running score, and reviews any missed questions at the end. Because every stub is randomized, students can replay for fresh numbers as many times as they like.
Wrap-up (10 min). Use the discussion questions below. The big idea to land: your paycheck is not what you earn — taxes come out first, and take-home pay is what you actually budget with.

Guided practice — the interactive game

The game is the guided practice: ten questions on realistic, randomized pay stubs. Questions 1–3 compute the FICA payroll tax (gross × 7.65%); questions 4–6 compute net pay (gross − deductions); questions 7–10 are read-the-stub judgment calls — which figure is your take-home pay? and which deduction is required by law? Students get immediate feedback on every question, a running score, and a review of any misses at the end. Every stub is a full, itemized record — employer, pay period, hourly rate and hours, each deduction, and year-to-date totals.

Assessment — check for understanding

Students have met the goal when each one can, without help: define gross vs. net pay, compute the 7.65% FICA tax on a given gross, find net pay by subtracting the deductions, and point to which lines on a stub are required taxes versus optional benefits. A quick paper exit ticket works well: “Gross pay is $1,600. The only deductions are FICA (7.65%), $180 in federal and state income tax, and $40 for health insurance. Find the FICA amount and the take-home pay.” (FICA is $122.40; take-home pay is $1,257.60.)

Differentiation & extension

On-level (grades 9–10): keep the focus on FICA and net pay; let students use a calculator for the percent math and concentrate on what each line of the stub means.
Advanced (grades 11–12 & adult): have students find the effective deduction rate (total deductions ÷ gross) and compare two stubs at different wages, then project take-home pay over a full year.
Support: pre-teach “percent of a number” with a couple of plain examples (10% of $1,000) before the FICA rounds; pair students; let them replay one stub type until it clicks.
Extension: move on to Taxes & Your W-4 (why your withholding is what it is) and the printable Understanding Your Paycheck packet; students weighing real jobs can try Comparing Job Offers, where this same take-home math decides which offer actually pays more.

Walkthrough

What students will see

The Your First Paycheck game start screen inviting students to read their first pay stub — **1. Start the activity.** A short intro sets up the game — free, with simulated pay stubs and no login beyond a student account.

A Your First Paycheck question — a realistic pay stub with gross pay, deductions, and a question about payroll taxes or take-home pay — **2. Read the pay stub.** Students work through a realistic, itemized stub — computing the FICA tax, finding net pay, and telling required taxes from optional benefits.

Interactive Activity