1. What is a pre-tax deduction?

- With pre-tax deduction your gross pay is reduced by the deduction prior to federal and state tax withholding. This means that you do not pay taxes on the amount deducted as a pre-tax deduction.

- Pre-tax payroll deduction allows for your parking to be deducted directly from the employees’ paycheck on a bi-weekly or monthly basis.

2. What are the benefits of using pre-tax payroll deduction?

- The pre-tax deduction is not reported on the W2 for tax filing.

- Payroll deduction will save you money. The amount saved will depend on each person’s tax status, but the withholding rates vary from 10% to 35%.

3. Example benefit of using pre-tax payroll deduction:

- For every $40 withheld, the individual could save anywhere from $4 to $14 in withholding.