The HR Dictionary


Payroll deductions are wages withheld from an employee's total earnings for the purpose of paying taxes, garnishments, and benefits, like health insurance. As long as the employee has given written consent or signed an agreement, these will be deducted from a paycheck on a pre-tax or post-tax basis. On the other hand, taxes and wage garnishments are required to be deducted by law, and employers who fail to properly withhold these deductions may be held accountable for the unpaid sums.

Every pay month, payroll deductions are typically processed based on the applicable tax legislation, withholding data provided by your employees, or a court order. You have two options for making the calculations: manually or automatically utilizing a payroll service provider. However, payroll process automation is a popular choice among businesses nowadays since it minimizes errors and guarantees that payroll details are submitted on time to the appropriate parties. These capabilities are available in most advanced HRISs that provide comprehensive HR management solutions.