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