When your payroll check is done, are the taxes calculated on total earnings – even with pre-tax deductions?

February 18th, 2010

I have pre-tax medical and retirement taken out but when I calculate out how much of my total gross I take home, the percentages indicate the taxes are being calculated on total earnings, not the total after pre-tax deductions. I thought that was the benefit of pre-tax deductions – you didn’t get taxed on it. If anyone knows of the legal writings for payroll practices, I would like to know, thanks.

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  1. vegas_iwish - February 18th, 2010 at 10:02 pm

    Tish is correct + don’t get hooked staring at the stub. You find out how much you really pay by doing the return. Only if the W-2 seems to have too much gross fed taxable (ie Pre-tax items not excluded) should you even pay any attention at all.

  2. Simba - February 18th, 2010 at 10:02 pm

    they won’t tax your pretax deductions, hence the name

  3. Tish - February 18th, 2010 at 10:02 pm

    I used to work for a payroll service. It’s been awhile, but if I remember right, they figure FICA based on your total gross income and the federal withholding is based on the gross minus your pretax deduction.

  4. Karrose - February 18th, 2010 at 10:02 pm

    Taxes are not supposed to be calculated including pre-tax medical & retirement. Just ask your employer maybe it’s just an oversite..

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