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A deduction is any money you subtract from an employee’s total wages.HR Software in Pakistan
You will deduct payroll taxes from the wages of every employee. The amount you withhold from each employee will vary depending on total earnings and how many withholding allowances the employee claims.
Payroll taxes include federal income tax, state income tax, local income tax, federal unemployment tax, state unemployment tax, Medicare tax, and Social Security tax.
A garnishment is a court-ordered deduction post-tax deduction. A garnishment is used to pay off an employee’s overdue debt. You could be instructed to deduct money from an employee’s paycheck to pay for unpaid taxes, defaulted loans, and overdue child support. If you need to deduct a garnishment, you will receive a notice from a court.
Net and gross pay
You will show an employee’s net and gross pay on a pay stub. Gross pay is an employee’s total pay. IRS forms typically ask for an employee’s gross pay. Net pay is an employee’s pay after all deductions are subtracted. Net pay is an employee’s take home pay. Banks and other loan providers typically want to know someone’s net pay. Performance Management Software in Pakistan