HRPrimes
HR glossary · Pay and payroll

Deduction

An amount taken out of gross pay.

A deduction is an amount subtracted from gross pay. Common examples are the employee's share of social insurance, income tax, loan instalments and penalties for lateness or absence.

In practice

Rules for lateness and absence deductions can be tied to attendance data, so they are applied consistently instead of by hand.

See how these work together in one system.