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Pre Tax vs Post Tax Deductions

PaycheckCalculatorOnline TeamMarch 10, 20265 min read

Not all payroll deductions work the same way. Pre-tax deductions lower your taxable income before the government calculates your withholding. Post-tax deductions come out after taxes are applied.

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Common Pre-Tax vs Post-Tax Deductions

Pre-TaxPost-Tax
Traditional 401(k)Roth 401(k)
Health insurance premiumsTerm life insurance (above $50k)
HSA contributionsDisability insurance
FSA contributionsCharitable payroll deductions
Commuter benefitsWage garnishments

Tip

Pre-tax deductions reduce both your federal and FICA taxes. The effective cost of a $1,000 pre-tax deduction at 22% bracket is only ~$698.

Frequently Asked Questions

Yes, employer-sponsored health insurance premiums are typically deducted pre-tax, reducing your taxable income.

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