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Home  »  Resources  »  HR and Employee Benefits Glossary

Pre-tax Deduction

What is a Pre-tax Deduction?

A pre-tax deduction is an amount subtracted from an employee’s gross wages before taxes are calculated. This reduces the employee’s taxable income, resulting in lower income tax liability. Common examples include contributions to retirement plans (e.g., 401(k)), health insurance premiums, and flexible spending accounts (FSAs).

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Seamless Onboarding Made Easy

My Benefits Channel simplifies onboarding with a mobile-friendly, paperless system that automates tasks like e-signatures, pre-filled forms, and progress tracking.

Easily manage and store essential documents, create custom workflows, and integrate with payroll systems to make the process seamless for both you and your new hires.

Request your free demo today!

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