Answer: The money taken out of an employee's paycheck for purposes other than retirement, taxes, or government programs is a voluntary payroll deduction.
Explanation:
Voluntary payroll deductions are either post-tax or pre-tax.
Pre-tax deductions: deducted from an employee's paycheck before taxes are calculated. This means that the employee pays less in taxes because the amount of their taxable income is reduced. After taxes are calculated, post-tax voluntary payroll deductions are deducted from an employee's paycheck.
The advantages of pre-tax voluntary paycheck deductions are that they lower an employee's taxable income and save the employee money on taxes.
Post-tax voluntary payroll deductions do not lower an employee's taxable income. Voluntary payroll deductions can be a great way to save money on taxes and reduce a person's taxable income.