What is a deduction?
A deduction, in the broadest sense, is any reduction from gross pay applied to an employee's paycheck to derive netpay. Deductions can be voluntary or involunary, meaning they can be initiated by the employee or required of the employee without their consent. Common examples of voluntary deductions include retirement contributions (401(k), IRA), insurance premiums (medical, dental, vision), and child care. Common examples of involuntary deductions include child support, tax levies, and other court orders.