What is Pre-tax deduction?
A pre-tax deduction comes out of your pay before income tax is calculated, lowering your taxable wages.
Common pre-tax deductions include traditional 401(k) contributions, health insurance premiums through a cafeteria plan, HSA contributions, and FSA contributions.
Which taxes a deduction reduces depends on its type. For example, traditional 401(k) contributions reduce income tax but not Social Security or Medicare.
Where to find it on your paystub
Listed under Deductions or Pre-Tax Deductions, sometimes marked with an asterisk.
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