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Other Payroll Deductions

Besides FICA taxes, state unemployment contributions, and income taxes, most companies have other deductions that must be taken into consideration when preparing the payroll.

Many payroll deductions result from company policies, collective bargaining agreements, court orders, or employee authorizations. Some of the purposes for making deductions include:

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• Group insuranceWhen recording a payroll that makes deductions from employees wages for group insurance, the amount withheld from their wages is applied toward the payment of their share of the premium and _______ subject to FICA, FUTA or federal income tax withholding.
• Health insuranceMany companies have developed their own health insurance plans for employees or are members of private insurance groups that provide coverage for employees of companies that are members of the group. If these withholdings are made by means of a salary reduction for a non-qualified benefit plan, the premiums are paid with_______ .
• Purchase of government savings bondsEmployees complete an authorization form that directs the employer to withhold _______ and the frequency.
• Union duesWhen unions require that an employee pay dues to the union through wage deductions, this is known as_______ .
• Garnishment of wagesA garnishment is a portion of a person's wage that is _____ withheld as a _______ . Garnishments are based on disposable earnings which, looking at the list below, include __________ :
  • Federal income taxes
  • FICA taxes
  • State unemployment and disability taxes
  • State employees' retirement systems
  • State income taxes
• Pension and retirement contributionsSome pension plans are financed solely by employer contributions, but other plans involve employee contributions such as 401(k) plans. Additionally, some employers provide their employees with the opportunity to set up their own Individual Retirement Accounts (IRA) through a payroll deduction plan. If an employee participated in a SIMPLE plan, their deduction from total wages would be __________ determining the federal income tax withholding.