Payroll Deductions

Payroll deductions are amounts taken from an employee’s gross pay before net pay is calculated. They can include required taxes and voluntary deductions for benefits, retirement savings, or other programs.

Some deductions are required by law, such as certain taxes or valid garnishment orders. Others are elected by the employee, such as health plan premiums or retirement contributions. Whether a deduction is taken before or after taxes depends on the deduction and plan rules. Employers should keep employee authorizations and apply deductions consistently and accurately.

A writ of garnishment is one type of court order that may require an employer to withhold part of an employee's earnings. Before processing it, confirm the order's scope, applicable withholding limits, and priority relative to other deductions or orders.