Paystub Basics
Pre-Tax vs Post-Tax Deductions on a Paystub
Traditional 401(k), Section 125 premiums, HSA and Roth lines each skip different taxes. Here is how to tell them apart from the taxable wages printed on a stub.
Table of Contents
What this guide covers
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Table of Contents
What this guide covers
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- Pre-tax is not all-or-nothing
- Where the difference shows on a paystub
- The same $100 deduction taken two ways
- Traditional and Roth 401(k) lines compared
- Deductions people often assume are pre-tax
- How pre-tax deductions carry into W-2 boxes
- The sequence payroll follows
- State income tax may not follow the federal rule
- Checking whether a label is telling the truth
- Entering pre-tax and after-tax items on a paystub record
Pre-tax deductions come out of gross pay before one or more taxes are figured, so they lower taxable wages as well as net pay. Post-tax deductions come out after taxes are calculated, so they lower net pay only. On the stub, the gap shows up as taxable wages lower than gross pay.
The catch is that "pre-tax" is not one category. A deduction can skip federal income tax but still count for Social Security and Medicare, or it can skip all three. The sections below show which common deductions do which, run side-by-side calculations with made-up figures, and explain how to read the labels. If you want the wider map of deduction types first, see paystub deductions explained.
Pre-tax is not all-or-nothing
Each tax has its own definition of wages, so a deduction is only "pre-tax" for the taxes that exclude it. The table covers the deductions employees most often ask about.
| Deduction | Federal income tax withholding | Social Security and Medicare | Typical stub label |
|---|---|---|---|
| Traditional 401(k) deferral | Not withheld on it | Still taxed | 401K, 401K PRE |
| Medical, dental or vision premium through a Section 125 plan | Exempt | Exempt | MED 125, DEN PT |
| HSA contribution through a cafeteria plan | Exempt up to the annual limit | Exempt up to the annual limit | HSA EE |
| Roth 401(k) deferral | Taxed | Taxed | 401K ROTH |
| Union dues, charity, garnishment | Taxed | Taxed | DUES, CHAR, GARN |
The 401(k) row follows the IRS retirement plan FAQs, which say elective deferrals are not subject to income tax withholding but are included in wages for Social Security, Medicare and federal unemployment tax. The health and HSA rows follow Table 2-1 of IRS Publication 15-B (2026).
The employer decides which deductions run through a cafeteria plan. A premium paid outside a Section 125 plan is an after-tax deduction, even though it buys the same coverage.
Where the difference shows on a paystub
Stubs signal the split in three common ways:
- Separate blocks. Some layouts print "Pre-tax deductions" and "After-tax deductions" as two groups with their own subtotals.
- Tags in the label. Short markers such as PT, PRE, 125 or BT (before tax) sit next to pre-tax items, and AT, POST or ROTH next to after-tax ones.
- Taxable wage lines. A stub may show federal taxable wages, Social Security wages and Medicare wages as three separate figures, each lower than gross by a different amount.
The taxable wage lines are the most reliable signal. Labels are written by whoever set up the payroll codes, while the wage figures come straight from the calculation.
The same $100 deduction taken two ways
Illustrative example (made-up figures): an employee earns $2,000.00 gross every two weeks and pays a $100.00 medical premium. In column A the premium runs through a Section 125 plan; in column B it is taken after tax. To keep the arithmetic visible, federal income tax withholding is assumed to be a flat 10% of federal taxable wages. That 10% is an assumption for illustration, not an IRS rate, and state tax is left out.
| Line | A: Pre-tax premium | B: After-tax premium |
|---|---|---|
| Gross pay | $2,000.00 | $2,000.00 |
| Federal taxable and FICA wages | $1,900.00 | $2,000.00 |
| Federal income tax (assumed 10%) | $190.00 | $200.00 |
| Social Security at 6.2% | $117.80 | $124.00 |
| Medicare at 1.45% | $27.55 | $29.00 |
| Medical premium | $100.00 | $100.00 |
| Net pay | $1,564.65 | $1,547.00 |
Column A leaves $17.65 more in the deposit. That difference is exactly the tax on $100.00: $10.00 of assumed income tax, $6.20 of Social Security and $1.45 of Medicare. Across 26 paychecks it adds up to $458.90.
Related: What Does OASDI Mean on My Paycheck? Social Security Tax
Related: Workers' Comp Payroll Deductions: Who Pays the Premium?
Traditional and Roth 401(k) lines compared
Illustrative example (made-up figures): the same employee defers $150.00 per paycheck to a 401(k), using the same assumed 10% income tax withholding. Column A is a traditional deferral; column B is a Roth deferral.
| Line | A: Traditional 401(k) | B: Roth 401(k) |
|---|---|---|
| Federal taxable wages | $1,850.00 | $2,000.00 |
| Federal income tax (assumed 10%) | $185.00 | $200.00 |
| Social Security wages | $2,000.00 | $2,000.00 |
| Social Security at 6.2% | $124.00 | $124.00 |
| Medicare at 1.45% | $29.00 | $29.00 |
| 401(k) deferral | $150.00 | $150.00 |
| Net pay | $1,512.00 | $1,497.00 |
The traditional deferral leaves $15.00 more per paycheck, and all of it is income tax. Social Security and Medicare are identical in both columns because a traditional deferral still counts as FICA wages. How the two types are taxed years later, at withdrawal, is a question for the plan's materials or a financial professional, not something the stub can show.
Deductions people often assume are pre-tax
Several common lines look like benefits but come out after tax:
- Premiums paid outside a cafeteria plan. Some employers offer voluntary coverage, such as accident or hospital indemnity policies, on an after-tax basis only.
- Roth catch-up or Roth deferrals of any kind.
- Union dues and charitable pledges, which reduce the deposit but not the tax lines.
- Garnishments and child support, which are always figured after taxes from disposable earnings.
If one of these lines carries a "PT" or "125" tag, check the taxable wage figures before trusting the label.
How pre-tax deductions carry into W-2 boxes
The split does not stay on the paystub. At year end, W-2 Box 1 reports federal taxable wages, while Boxes 3 and 5 report Social Security and Medicare wages, so each box reflects a different set of pre-tax deductions.
Illustrative example (made-up figures): an employee's final stub of the year shows YTD gross pay of $52,000.00, YTD traditional 401(k) deferrals of $3,120.00 and YTD cafeteria-plan medical premiums of $2,600.00, with no other pre-tax items.
- Box 1, federal wages: $52,000.00 − $3,120.00 − $2,600.00 = $46,280.00
- Box 3, Social Security wages: $52,000.00 − $2,600.00 = $49,400.00
- Box 5, Medicare wages: also $49,400.00
None of the three boxes equals the $52,000.00 YTD gross, and that is expected. This is one of the most common reasons a W-2 seems not to match the last stub, a mismatch unpacked further in why YTD totals may not match.
The sequence payroll follows
Deductions are applied in a fixed sequence, which is why their position on the stub matters:
- Start with gross pay for the period.
- Subtract pre-tax deductions to reach the taxable wages for each tax.
- Figure federal, state and local income tax withholding, Social Security and Medicare, each on its own wage base.
- Subtract after-tax voluntary deductions such as Roth deferrals, dues and charitable pledges.
- Work out any garnishment from disposable earnings and take it.
- Add reimbursements to reach net pay.
Steps 4 and 5 may print in either order. The garnishment amount does not depend on voluntary after-tax deductions, because disposable earnings only subtract deductions the law requires.
State income tax may not follow the federal rule
States decide for themselves whether a deduction lowers state taxable wages. A contribution that is excluded from federal taxable wages may still be taxed by a particular state, so some stubs print a separate state taxable wages line that does not match the federal one. Local wage taxes can have their own definitions as well. The state revenue department publishes its treatment, and the employer's payroll provider applies it; the local tax labels that sit beside state lines are worth checking at the same time.
Checking whether a label is telling the truth
Labels are not always tagged, and a catch-all line can mix both kinds, as the "other deductions" line often does. A quick arithmetic test settles it.
Take gross pay and subtract only the deductions you believe are pre-tax for federal income tax. If the result equals the federal taxable wages printed on the stub, your reading is right. If it is off by the amount of one line, that line is being treated differently than its label suggests.
Run the same test against Social Security wages, remembering that a traditional 401(k) deferral should not be subtracted for that one. On the first example stub, $2,000.00 − $100.00 = $1,900.00 matches both wage figures in column A, which confirms the premium is pre-tax for all three taxes.
Entering pre-tax and after-tax items on a paystub record
A paystub-style record should show the tax treatment the payroll source actually used, not a guess. PayStubGo's form stores each custom deduction as a label and an amount, with no separate pre-tax switch, so put the status in the label, for example "Medical 125 (pre-tax)" or "Union dues (after-tax)". Then check that the tax amounts you enter already reflect that treatment. If you use the form's automatic tax estimates, compare them with the source payroll figures, because an estimate is not a payroll calculation. When a stub needs several labeled deduction rows, the advanced paystub builder keeps them together across multiple stubs.
Whether a particular deduction should be pre-tax depends on the employer's plan documents and on federal and state tax law, not on how a stub is laid out. The plan administrator or a tax professional can answer that for an individual situation, and PayStubGo only formats the amounts you supply.
Related: Open Enrollment 2027: How Benefit Elections Hit Your Pay Stub
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