Deductions Voluntary Employees Money Payroll Paid Pay Sign

All employees are "subject to" (affected by) "mandatory" (not optional) payroll deductions for taxes and certain benefits, but some employees "opt for" (choose to have) voluntary deductions, too.

"Union" (an organization where the members all work in the same industry and negotiate for what they want and need) "dues" (money paid each month or year to be part of an organization) are a common voluntary deduction. The dues are used to pay the union leaders for their time spent negotiating with the management.

Employees can sign up for automatic payroll deductions to nonprofit organizations. For example, they might choose to have $10 or $25 deducted each month to support their "alma mater" (the school where one earned a degree) or organizations that help low-income families. Some companies "match" (contribute the same amount) a percentage of their employees' charitable contributions. For example, if a company has a 20% match, the company will contribute $2 for each $10 the employee "donates" (gives to a nonprofit organization).

Some companies offer optional benefits to their employees, and if employees choose to sign up, they pay through a voluntary deduction. These can include "life insurance" (money paid to one's family after one dies), "long-term disability" (money paid if one cannot work for a long period of time), and "long-term care" (money paid if one cannot live alone and needs a lot of medical assistance). In some states, employees can sign up for voluntary payroll deductions to contribute to a "college savings plan" (money saved to pay for a child's future school or college/university costs).