After-Tax Deductions Definition
Term Definition
After-tax deductions are made after applicable payroll taxes are deducted and pre-tax deductions are made from employee wages.
Extended Definition
After-tax deductions are payments that are automatically deducted from employees’ post-tax income (the amount that remains after payroll taxes have been deducted and pre-tax deductions from paychecks have been made). The voluntary deductions are done for benefits sponsored by employees, such as disability insurance and Roth 401k contributions. Employees can choose to stop voluntary payroll deduction benefits anytime because after-tax deductions have no effect on taxable wages.
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