Payroll Deductions

Payroll deductions are amounts withheld from an employee's payroll check by their employer. Among these deductions are retirement plan and healthcare contributions, wage garnishments, income and FICA taxes. Deductions that are mandated are government taxes; however, other most other deducted amounts are voluntary.

No matter how many hours an employee has worked, payroll deductions must be withheld from payroll checks. If no deductions are withheld, the employer becomes liable and responsible for any mandated amounts that were supposed to be withheld. When an employee's insurance deductions are not withheld, the employer becomes liable to pay the deductions or to cancel the employee's insurance policy. It is always an employer's responsibility to make sure any payroll deduction is withheld in a timely manner.

Government-mandated payroll taxes include Medicare taxes, Social Security taxes and federal income taxes. Voluntary deductions are amounts paid for items such as 401(k) plans, insurance plans and sometimes union and uniform dues. Wage garnishments, such as child support payments can be automatically withheld from an employee's payroll check. Garnishments are court-ordered.

All voluntary payroll deductions are withheld from every payroll check an employee receives, even including any bonus and commission checks they receive. All mandated amounts deducted come out of every paycheck.

The payroll department of a business is solely in charge of withholding the correct amounts from employee's payroll checks. For small businesses without a payroll department, the responsibility falls on the owner. Any amounts not correctly withheld are the business' responsibility to pay.