Involuntary Deductions

Involuntary Deductions

These are the payroll deductions that must be taken out of an employee’s pay. There are 4 main types of taxes, there might be more depending on where you live.

W-4 Form: The more allowances you claim, the less your employer will withhold from your paycheck each month

  • Claiming “0”
    • Maximum amount of money will be withheld from your paycheck each period
    • If you’re a student and your parents file you as a dependent
  • Claiming “1”
    • Claiming yourself as a dependent
    • Withholding less, and will get more each paycheck
    • Single and have 1 job
State Income Tax
  • Each state applies its own tax rate.
  • Can be a flat percentage or based on your income
Medicare
  • 1.45% of their gross income to Medicare, which provides health insurance for retirees
  • Every employer then contributes an additional 1.45% on behalf of each employee
Federal Income Tax
  • W-4 form
  • Based on an employee’s marital status and withholding allowances claimed
  • Communicates how much your employer should withhold from your paycheck for federal taxes
Social Security
  • Provides supplemental income to retirees
  • Employees to contribute 6.2 percent of their gross income 
  • Your employer matches that with a 6.2 percent contribution of your gross income