Deductions are the amounts subtracted from an employee’s gross pay to cover taxes, benefits, or other obligations. They reduce the total earnings to calculate the employee’s net pay (take-home pay).
Common types of deductions include:
- Taxes: Federal, state, and local income taxes, Social Security, and Medicare
- Benefits: Health insurance, dental, vision, or retirement plan contributions
- Other Withholdings: Wage garnishments, loan repayments, or voluntary contributions
Example: If an employee’s gross pay is $3,000 and deductions total $500, these amounts are subtracted to determine the net pay of $2,500.
With SecurePayStubs, all deductions are automatically calculated and clearly displayed, making it easy for employers and employees to see how net pay is determined.
Last modified: January 22, 2026
