Payroll Deductions

Set up pre-tax and post-tax deductions.

An employee’s gross pay is never what they take home. Between taxes (which you can’t avoid) and deductions (which are often voluntary), a $5,000 paycheck might become$3,200 by the time it hits their bank account.

Deductions cover benefits, retirement contributions, garnishments, and anything else that comes out of their pay before or after taxes.

Deduction types

Pre-tax deductions

These come out before taxes are calculated — meaning they reduce taxable income. Employees pay less in taxes when they use pre-tax benefits.

Type	Common examples
Health insurance	Medical, dental, vision premiums
HSA contributions	Health Savings Account deposits
FSA contributions	Flexible Spending Account deposits
401(k) traditional	Pre-tax retirement savings
Commuter benefits	Transit passes, parking

Post-tax deductions

These come out after taxes are calculated — the employee has already paid income tax on this money.

Type	Common examples
Roth 401(k)	After-tax retirement (tax-free withdrawals later)
Life insurance	Employer-paid amounts over $50k are taxable
Garnishments	Court-ordered child support, tax levies, creditor judgments
Union dues	If applicable
Charitable donations	Payroll giving programs

Setting up deductions

Company-level setup

First, create the deduction types your company offers:

1. Go to Settings

   Navigate to Settings → Payroll → Deductions.

2. Add a deduction type

   Click Add Deduction Type.

3. Configure it

   • Name (e.g., “Medical Insurance - Employee”)
   • Pre-tax or post-tax
   • Category (health, retirement, other)
   • How to calculate (fixed, percentage, per hour)
4. Save

   Now you can assign this deduction to employees.

Employee-level assignment

Each employee opts into (or is assigned) specific deductions:

1. Open the employee’s profile
2. Go to Deductions
3. Click Add Deduction
4. Select the type and enter their specific amount
5. Save

Different employees can have different amounts — one might contribute 6% to 401(k), another might contribute 10%.

Calculation methods

Method	How it works	Example
Fixed amount	Same dollar amount each period	$200/paycheck for health insurance
Percentage	Percent of gross pay	6% of gross to 401(k)
Per hour	Amount times hours worked	Union dues at $0.50/hour
Annual limit	Stops when limit is reached	401(k) stops at $23,000

Percentage example

Employee contributes 6% to 401(k):

• Gross pay this period: $5,000
• 401(k) deduction: $300

Next period the gross might be different (overtime, bonus), and the deduction adjusts automatically.

Annual limits

The IRS caps certain deductions:

Type	2025 Limit
401(k) traditional/Roth	$23,000 ($30,500 if 50+)
HSA (individual)	$4,150
HSA (family)	$8,300
FSA	$3,200

Pluvel tracks year-to-date totals and automatically stops deductions when an employee hits the limit. No action needed from you.

Employer contributions

Many benefits include an employer contribution:

Benefit	Typical employer contribution
401(k)	50% match on first 6% (employee contributes 6%, you add 3%)
HSA	Fixed amount per month ($50-100 common)
Health insurance	50-80% of premium

Set up employer portions in the deduction settings. They appear on the payroll summary as employer cost — not deducted from the employee.

Garnishments

You just received a court order requiring you to withhold money from an employee’s paycheck. This isn’t optional.

1. Receive the order

   It arrives by mail — from a court, state agency, or the IRS.

2. Add the garnishment

   Set up the deduction with:

   • Type (child support, tax levy, creditor judgment)
   • Amount or percentage (as specified in the order)
   • Maximum per pay period (some have caps)
   • End date (if the order specifies one)
3. Withhold automatically

   Every payroll, the amount comes out.

4. Send the money

   Pay to the agency or recipient specified in the order, on the schedule they require.

Garnishment priority

When an employee has multiple garnishments, federal law dictates the order:

1. Child support — always first
2. Tax levies — IRS and state tax
3. Other creditors — credit cards, judgments, etc.

And there are limits on how much total can be garnished (typically 25-50% of disposable income).

Follow garnishment orders exactly as written. Failing to garnish (or garnishing wrong) can make you personally liable. When in doubt, consult an employment attorney.

Effective dates

Deductions can be scheduled:

• Start date — When the deduction begins (new hire, open enrollment)
• End date — When it stops (employee leaves plan, garnishment satisfied)
• Change effective date — When an amount change takes effect

Set these in advance. During open enrollment, you might set new rates to start January 1 even though it’s November.

Reports

Track what’s being deducted:

Report	What it shows
Deduction summary	All deductions by type and employee
Benefit costs	What benefits are costing you (employer portions)
Garnishment register	Active garnishments and payments made
401(k) contributions	For sending to your plan administrator

Direct deposit

Get paychecks into employee bank accounts.