Starting a New Job

Starting a new job is exciting, but it may also be overwhelming.  You will have to make decisions about how you will be paid and the benefits you will receive, if your employer offers them.

Here are a few tips to make the process easier.

  • Sign up for direct deposit.  Many employers offer employees the option to receive their paycheck by direct deposit.  This means that your pay will be directly deposited into your bank account on payday.  Getting your paycheck by direct deposit provides immediate access to your money. It also makes it easier to save a portion of your paycheck.  To sign up for direct deposit, you will need your checking account number and your bank’s routing number.  If you want to deposit a portion of your paycheck into a savings account, you’ll need your savings account number too.
  • Complete tax forms. When you start a new job, you must fill out IRS Form W–4. This form determines how much your employer will take out of your paycheck for income taxes. The amount of income tax that your employer will take out depends on:
    • how much you earn;
    • your marital status; and
    • the number of allowances you claim.

Completing this form correctly ensures that your employer withholds enough of your income in taxes.  If you do not withhold enough, you may owe the IRS money.

  • Begin saving for retirement. If your employer offers a retirement savings plan, enroll in it.  The earlier you start saving for retirement, the better off you will be.  These retirement plans are often called  401(k) or 403(b) plans.  If you work for the government,  you be able to save in a 457 plan or the Thrift Savings Plan.  Many employers offer to match the amount employees put into retirement savings.  Find out if your employer offers a match.  Then you will need to know how much to contribute in order to qualify for it.   If you do not take advantage of an employer match, you are leaving money “on-the-table” that could help provide you with basic necessities in old age.  Finally, in most cases, the money you put into a qualified retirement tax is not taxed.  This is often called “pre-tax dollars” or “pre-tax money.” This is another advantage of saving for retirement through a qualified plan.
  • Select additional benefits. Some employers offer employees benefits beyond retirement savings.  These may include health, life, or disability insurance, paid time off, and sick leave.  You may be able to save in a flexible spending account (FSA).  This allows you to set aside money before you pay income taxes on it to cover a wide range of healthcare costs.  You may also qualify for parking or even tuition reimbursement for more training or education.

Your employer may pay some of these benefits. Other benefits may require a contribution from you.  Read benefits information carefully to make sure you understand which benefits require employee contributions. Select benefits that best meet the needs of you and/or your family.

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