So you got a job, that’s super great, congrats! You’re about to get hit with a truckload of paperwork and have you make decisions that will have a major impact on your financial life. In this episode we’ll take a deep dive into that W-4 form that most employees have to fill out, plus take a microscope to a pay stub to learn what all those pesky deductions are. We’ll also look at how to sign up for your employer’s retirement plan and why you should. And for those of you evaluating job offers from less conventional companies, we’ll look at stock options and why you should proceed with caution.
Why do companies offer benefits? To entice employees to work and stay with the company so they don’t have to train new people. Seems simple, right?

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The W-4

What’s the worst part of getting a new job? The W-4 form.
This little piece of paper determines the real amount of your weekly paycheck and how much money is withheld for the IRS aka your tax bill.

Good news! If you screw up your withholding you can re-file your W-4 and change the withholding amount.

I blab for about three minutes about all the different exemptions and withholding.
If you want the maximum withheld, put a 0! You can also add a dollar amount of additional withholding in cases when you know you have other income that isn’t taxed, such as freelance income on a 1099. Did you listen to Episode 4? It’s all about taxes.

The Non-Money Minute

Garnish it with a homemade brandied cherry. Melissa Clark’s recipe is the BEST.

Your Paycheck

We go through all the crap on your pay stub that makes your take-home pay smaller.

Not every state has income tax (state tax that is, everyone has to pay federal income tax).

You could move to Florida, Washington, or somewhere else!

You know what’s cool? Getting a bonus at the end of the year. But remember that your bonus is taxed like regular income so don’t go spending it right away.


Your company may have tax advantaged retirement accounts. The most common one is a 401(k), but there are also 457 plans and 403(b)s. Money is taken out of paycheck PRE-TAX so it grows until your retirement with limited disruptions. Start contributing EARLY so you can take advantage of compound interest. Here is a really neat chart showing the power of compound interest.

Stock Options

Stock is offered to early employees when actually cash in the bank is tight. Employees who believe in the company often take a pay cut and are compensated in equity.

Here’s more about stock options.

Tread carefully. If you’re not one of the very first employees, it’s very hard to actually make money from your options.
Thanks for listening!