What is Payroll Deduction?

[niyati]

I’m trying to get a better understanding of payroll deductions and how they work. I know they’re amounts taken out of an employee’s paycheck, but I’m unclear on the different types—like which are mandatory vs. voluntary?

 

[jainnorton]

Payroll deduction is the process where an employer withholds a portion of an employee's gross pay for taxes, insurance, retirement plans, or other purposes before the employee receives their net pay.

 

[Shane Warne]

Payroll deduction is an amount withheld from an employee’s paycheck by the employer to cover taxes, benefits, or other authorized expenses like health insurance or retirement contributions.

 

[Emly]

Payroll deduction is the amount of money automatically taken out of an employee’s paycheck by their employer to cover various obligations. These can include taxes (like federal and state income tax), benefits (such as health insurance or retirement contributions), and other voluntary or mandatory deductions. It helps ensure timely payments and simplifies financial management for both employers and employees.