Deduct Order

The Deduct Order determines the order relative to the withholding of taxes  in which this deduction or benefit will be applied to an employee's wages. The options are Pre-Social Security, Pre Tax, Tax, and Post Tax.

Pre-Social Security

These deductions/benefits are applied to the employees' wages before federal taxes, state taxes, FICA, and Medicare are applied. This deduction is commonly referred to as a Sec 125 deduction. Items usually associated with this type of deduction are medical, childcare, and medical flex spending accounts. This deduction results in the contribution being exempt from federal & state taxes, FICA, and Medicare.

Pre-Tax

These deductions/benefits are applied to employees' wages before the calculation of state & federal withholding, and after FICA & Medicare are applied. This deduction type may also be called a tax-deferred pretax contribution. This type of deduction is usually for retirement contributions.

Tax

This order is assigned to system deductions which are generally the taxes that are withheld from the employees' wages.

Post-Tax

These deductions/benefits are applied to the employees' wages after all taxes have been applied.

Return to Add a Deduction or Benefit

Return to Manage Deductions Overview