> ## Documentation Index
> Fetch the complete documentation index at: https://docs.pluvel.com/llms.txt
> Use this file to discover all available pages before exploring further.
# 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:
Navigate to **Settings → Payroll → Deductions**.
Click **Add Deduction Type**.
* Name (e.g., "Medical Insurance - Employee")
* Pre-tax or post-tax
* Category (health, retirement, other)
* How to calculate (fixed, percentage, per hour)
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.
It arrives by mail — from a court, state agency, or the IRS.
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)
Every payroll, the amount comes out.
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 |
Get paychecks into employee bank accounts.