What are considered voluntary deductions from gross pay?

Voluntary deductions from gross pay are those deductions that employees can choose to participate in or contribute to, rather than those that are mandated by law or employer policy. In this context, trade union fees and additional pension contributions fall into this category because they are typically optional for employees. Employees may elect to join a trade union and pay fees, or they may choose to contribute additional funds to a pension plan beyond what is required.

In contrast, mandatory payroll taxes are not optional and must be withheld from an employee's pay according to tax laws. Retirement fund contributions made by the employer are generally not deducted from gross pay in the same sense, as they are contributions made by the employer rather than the employee's direct choice. Basic health insurance premiums often fall under employer agreements and may be mandatory, depending on the plan, rendering them not voluntary. This distinction helps clarify why trade union fees and additional pension contributions, which are discretionary, are classified as voluntary deductions.