Day 1 on the job!

Day 1 on the job!

April 27, 2015

Your first day on the job is not all that different from your first day of school, except now everyone shaves and snack time has been replaced by after work socializing of a different nature.

That first day of school, you learn you are supposed to show up on time and wear something nice. You will learn a bunch of new things and you have no idea where to sit at lunch or with whom. The same thing goes for work really. You show up on time and wear something nice. You will learn a bunch of new things and you still don’t know where to sit at lunch or with whom.

Decisions you make on the first day of work won’t be all that difficult, but you may not have had to deal with some of them before. So here’s the 411 to help you out. Sadly, when it comes to where to sit for lunch, you are on your own.

Attire—When you accept the position, ask your supervisor/manager about appropriate attire. There are widely varied opinions of what the terms business professional, business casual, and casual actually mean. Before you show up for Casual Friday in sweats and sneakers it is best to know that to your employer, casual attire for men actually means khakis and a button-down shirt and tie—sans jacket.

Health Insurance Decisions—You may have been covered by your parents’ health insurance and are allowed to remain on it until age 26. However, if your employer offers health insurance, this is an important benefit. You need to read and understand the details of your plan and what it covers. If you have questions, by all means ask because you can only change coverage specifics on an annual basis. The insurance lingo is the same for most plans and includes words like Deductible, Co-payment, Premium, and Out-of-pocket maximum. You need to know what your obligations are to the plan. Some employers have wellness programs included in their health plans and strongly encourage participation with lower contribution rates for employees who participate.

Retirement—It may seem light-years away, but start saving for retirement with your first paycheck. You can start a payroll deductible 401k or 403b retirement account which will be on a pre-tax basis, meaning the amount you contribute is deducted from your pay before income taxes are figured. Sometimes employers contribute or match your contribution to your account up to a certain percentage. It is important to know you if you take money out of your 401k before age 59½ you will normally have to pay a penalty plus income tax on that amount. There will be several decisions to make on how you want to invest your 401k account but be sure to read the details and know you can make changes to how your money is invested.

W-4 and Deductions —Your employer will also ask you to fill out a W-4 form, which deals with withholding for taxes. The W-4 form lets you decide when you will pay taxes, but ultimately you will still pay the same amount. Most likely, if you are single new graduate, you will want to claim “1” deduction on the W-4 which should have you coming out pretty close to even at the end of the year on what is owed in income taxes.

Paychecks 101—For many people, their first payday was a shocker! You cannot just divide your established salary by the number of pay periods and expect that to be your paycheck. Be ready for lots of deductions, such as for Federal Tax, Social Security, Medicare, State Tax, City Tax, etc. It all adds up to about 30% of your pay. Budget wisely!