What is payroll deduction?

[niyati]

I’m trying to understand how payroll deductions work, especially what amounts are typically taken out of an employee’s salary.

 

[maria]

Payroll deduction refers to the process where an employer withholds specific amounts from an employee's gross pay (total earnings before deductions) to cover various expenses, such as taxes, insurance premiums, retirement plan contributions, and other authorized deductions. These deductions can be mandatory (required by law) or voluntary (chosen by the employee). The remaining amount after deductions is the employee's net pay, or take-home pay.

 

[Olivia]

Payroll deduction is the amount of money your employer takes out of your paycheck before you get it. This can include required deductions like taxes and social security, as well as optional ones like health insurance or retirement savings. What’s left after these deductions is your take-home pay.