List of Types of Payroll Deductions
- There are a number of reasons for which money might be deducted from your paycheck.money money money III image by imagenation from Fotolia.com
Your salary is subject to a number of deductions and is generally not reflective of how much pay you'll take home. Money can be deducted from your paycheck for a number of reasons, including mandatory state and federal taxes, voluntary elections such as uniforms, retirement or parking, and garnishments for child support or bankruptcy. - The most common type of payroll deduction is federal and state payroll taxes. In most cases, these are mandatory, although certain states do not have income taxes. Generally, these rates are determined by the amount of pre-tax income earned and may vary slightly between pay periods depending on number of hours worked and any bonuses or commissions paid.
- Some employers may allow employees to deduct the costs of supplementary items like parking, uniforms or meals through so-called "voluntary" payroll deductions. Other voluntary deductions include premiums for medical, dental and vision insurance and 401(k) retirement contributions.
- In some cases, an employee's wages may be withheld as the result of a court order. This is known as garnishment and can occur because of a bankruptcy, child support settlement or any number of other issues. Generally, the garnishment will be for a fixed amount, not to exceed a certain percentage of the gross pay. Garnishments are usually deducted from income that has already been taxed.
