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 p a y c h e c k m i g h t b e c o m e 5,000 paycheck might become 5 , 000 p a yc h ec kmi g h t b eco m e
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:
Go to Settings
Navigate to Settings → Payroll → Deductions .
Add a deduction type
Click Add Deduction Type .
Configure it
Name (e.g., “Medical Insurance - Employee”)
Pre-tax or post-tax
Category (health, retirement, other)
How to calculate (fixed, percentage, per hour)
Save
Now you can assign this deduction to employees.
Employee-level assignment Each employee opts into (or is assigned) specific deductions:
Open the employee’s profile
Go to Deductions
Click Add Deduction
Select the type and enter their specific amount
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 ( 23,000 ( 23 , 000 ( 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.
Receive the order
It arrives by mail — from a court, state agency, or the IRS.
Add the garnishment
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)
Withhold automatically
Every payroll, the amount comes out.
Send the money
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:
Child support — always firstTax levies — IRS and state taxOther 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
Direct deposit Get paychecks into employee bank accounts.
