Congratulations! You finished college and got yourself a shiny new job. Yay! All those years of hard work have paid off and you’re now employed and getting a bigger paycheck than you’ve ever had before. (We hope!). But, what to do with all that newfound money? Well, option one is to send it to me, but that probably won’t happen, so here’s what you should be doing.
Check the paycheck for accuracy.
You’d be surprised, but HR people and Payroll people are actually human and make mistakes from time to time. Make sure the rate you are paid is the same rate as in your offer letter. If it’s not, bring it to their attention the very same day-even if it’s for more. Why? Because if it’s for more than your offer letter says, they can require you to pay it back. If it’s for less, you’re being (accidentally) cheated. It’s very easy to fix a paycheck error on one paycheck. It’s not so easy when you don’t notice until you get your tax documents next year, or even late. Yes, people sometimes don’t notice errors for years and it’s a huge mess by then.
To keep reading, click here: What to Do with Your First Paycheck
Yes, my first paycheck from a company had an error. Somebody transposed two digits and my gross pay was short $750. When I brought this to the attention of the HR generalist, she was incredulous, but I had my offer letter in hand to prove my salary.
On another occasion when I was working in Penang, Malaysia, I needed to get my W-2 so I could file my income tax return. After three weeks I called the HR director to ask what became of my W-2. A few days later I received and overnight envelope with the W-2 inside the original envelope. Some bright light in the HR department sent my W-2 to Penang, China.
Items 1 and 2 – check your pay amount and your deductions amount – should be done with EVERY paycheck. Especially after ANY changes. Most payroll processing is done by computer system, and sometimes the computers have a blip just because a change somewhere set something else off that wasn’t at all expected. And if you have just made a change, or if it is the first paycheck of the year, you really need to make sure your benefits deductions are correct and what you were expecting from Open Enrollment. We’re no longer surprised when we get calls in February or March asking why a deduction is different from what it was in the fall, because of changes for the new plan year.
A professor I worked with was getting paid an extra $5,000 a term to work for the Dean’s Office. Payroll thought it would be even better to pay him $5,000 extra a month. It was a huge mess to sort it out after several mo the had gone by.
About 14 years ago, when I was working 20 hours a week, I got a promotion, I was told what my raise would be. My boss told me what my annual rate would be, and how that corresponded to what the annual rate would be for a full time at Then I got the pay stub from the direct deposit and the paycheck amount was the amount it would be if my annual salary was the amount that I had understood it would be if I was full time.
Payday was on a Friday and I got that paystub in the mail as I work from home, two hour time difference from my boss and our payroll department. For one brief weekend, we thought about “what if that was a really, really, really good raise?” But alas, it was a payroll error. My boss thanked me for immediately brining it to her attention.
And after 15 years of part time work, on 5/1 I went to full time status and last Friday’s paycheck was correct, and well more than double what that one in error was 14 years ago 😉
I’ve also been on the other end of doing payroll for my husband’s business. It’s a very small company and have used a time clock with paper time cards for years, we’re looking now to get a new time clock that will keep track of the hours and import into the payroll system because it is just too easy to have data entry errors.
Of course the most important thing to do after getting your first paycheck is to sit down and cry over how much in taxes are taken out
🙂
That might be the moment that some people move a little bit to the right from the political left. 🙂
Yep, the ol’ joke: “Who is FICA? And why does he take so much of MY money?”
re: paying down one debt at a time and minimum on the others Michelle Singletary, personal finance columnist in The Washington Post – whom I love, suggests paying off your smallest debt first, the the next smallest. This givesthe most psychological boost and helps you keep on track that way.