Here it is, the day you’ve waited two weeks for. It’s time for you to get your hands on that paycheck. You get the check envelope, open it up, pull out the check…and frown when you see a heavy chunk of your salary has been deducted from your pay.

If you’re like most Americans, this is something that happens all of the time. Deductions are an unwelcome part of steady employment, and it can really dampen the mood to see a considerable part of what you’ve worked for be stripped away.

But what are deductions on a paycheck, exactly? Why do they exist in the first place? This article goes in-depth with what deductions are so that you can be more informed. Keep reading to learn more.

What Are Deductions on a Paycheck?

We all hate to see deductions to our hard-earned paycheck, but there tends to be a good reason behind it all. Two main reasons for the reduction in pay are withholdings and deductions.

What are Withholdings?

Withholdings are the official governmental payouts. These deductions are taken out of your check each pay period in order to pay your income taxes for that specific period.

Paying your taxes is obviously required, but because you pay for them per paycheck instead of all at once during tax time, you will most likely receive a healthy return when tax season arrives.

What are Deductions?

The other funds that you see removed from your paycheck are called deductions. These particular reductions are based on what the employer themselves wish to dedicate the funds to, but in most cases they go to benefits and donations.

Usually, a portion of your money will go into things such as helping to build your retirement, paying for your company healthcare fee, or special funds that are unique to the company itself.


In either case, both withholdings and deductions are an important part of your paycheck, and although you may not like to see them now, you’ll definitely appreciate the return on investment in the future.

If you really want to make sure you stay on top of your game, there are ways to help manage your paycheck. Different methods of payroll outsourcing programs keep tabs on where your money goes, so you can always stay a step ahead.

We’ll Keep You Informed

Now that you know what are deductions on a paycheck, you won’t have to worry about why your money is being taken out of your paycheck. But that’s only the start of what you need to know to manage your money and your life.

At El Mens, we cover everything there is to know to help you live your best life. We have articles on managing your business, taking care of your health, mastering your lifestyle, learning the latest in technology, what’s happening in entertainment, and more.

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