Advertiser Disclosure

💳 Save money on credit card processing with one of our top 5 picks for 2024

The Complete Guide To Payroll Deductions

Understand which payroll deductions are voluntary and mandatory in our easy-to-follow guide on payroll deductions.

    Matt Sherman
  • Last updated onUpdated

  • Chelsea Krause
  • REVIEWED BY

    Chelsea Krause

    Lead Staff Writer

Our content reflects the editorial opinions of our experts. While our site makes money through referral partnerships, we only partner with companies that meet our standards for quality, as outlined in our independent rating and scoring system.
Key Takeaways
  1. Payroll deductions are amounts withheld from employees' earnings for taxes, benefits, and garnishments. These deductions are essential for determining the difference between gross and net pay.
  2. Employers must withhold deductions such as federal income tax, Social Security, and Medicare. Voluntary deductions, like 401(k) contributions and health insurance premiums, are made with employee consent.
  3. Calculating federal income tax withholdings can be complex, involving different methods depending on the employee's earnings and filing status. Using payroll software can simplify this process, reduce errors, and save time for business owners.
Matt Sherman

Matt Sherman

Lead Staff Writer at Merchant Maverick
Matt has been helping small businesses make decisions since 2017. He has written reviews and articles across many different channels but specializes in the point of sale, payroll, and small business insurance categories and has been quoted in articles for Fox Business, Forbes, and other publications. Prior to joining Merchant Maverick, Matt was a journalist and editor for 14 years for a pair of weekly newspapers. He is a graduate of the University of Oregon and currently resides in Gladstone, Oregon.
Matt Sherman
View Matt Sherman's professional experience on LinkedIn.
Matt Sherman

Latest posts by Matt Sherman (see all)

Our Experts Are Listening

Get in touch with a real human being on the Merchant Maverick team! Send us your questions, comments, reviews, or other feedback. We read every message and will respond if you'd like us to.

Our Experts Are Listening

Get in touch with a real human being on the Merchant Maverick team! Send us your questions, comments, reviews, or other feedback. We read every message and will respond if you'd like us to.