After-tax Deductions Definition

After-tax deductions are made after applicable payroll taxes are deducted and pre-tax deductions are made from employee wages.

After-tax Deductions Extended Definition
After-tax deductions are payments that are 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).

In short, withhold after-tax deductions after withholding taxes. After-tax deductions have no effect on taxable income.

The voluntary deductions are done for benefits sponsored by employees, such as disability insurance and Roth 401k contributions. Some employees may be subject to mandatory after-tax deductions, like wage garnishments.

Related Articles
What Are Post-tax Deductions from Payroll?
What’s the Difference Between Pre-tax and Post-tax Deductions?
Publication 15-B, Employer’s Tax Guide to Fringe Benefits

Last Updated By

Rachel Blakely-Gray | Feb 14, 2023