What Are Payroll Deductions?
Between gross and net pay there are federal/state taxes, FICA, health insurance, 401(k), garnishments and more. Pre-tax deductions lower taxable income; post-tax deductions do not. Ask which deductions are pre-tax when comparing offers.
Pre-tax vs post-tax
Pre-tax: traditional 401(k), HSA and some health premiums lower taxable wages.
Post-tax: Roth 401(k), union dues and some life insurance do not lower current tax.
Statutory: federal income tax, state tax and FICA (Social Security/Medicare).
Reading a pay stub
Check gross, taxable gross and net.
Reconcile YTD and the latest change (raise/benefit change).
Ask payroll about unusual deductions before tax season.
FAQ
Why is net pay lower than expected?
Often tax withholding, benefits, 401(k) or a one-time deduction; check YTD and line items.
Do pre-tax deductions always save money?
Usually lowers current tax, but may affect Social Security/loan income calculations; it depends.
Is this tax advice?
No; ask payroll or a tax professional about your situation.