What are additional voluntary deductions?

Additional voluntary deductions refer to specific contributions that employees choose to authorize beyond mandatory deductions. These deductions are often related to benefits or savings programs, such as retirement accounts (like a 401(k)), health savings accounts, or additional life or disability insurance. The key aspect of these deductions is that they are not required by law but rather are options that employees actively select to enhance their financial or benefit package. This choice allows employees to customize their payroll deductions according to their personal financial goals and needs.

In contrast, mandatory deductions required by law, or those strictly for tax purposes, do not provide this level of choice; employees do not opt into or out of these deductions. Similarly, while there may be limits imposed on some types of deductions, particularly for retirement accounts, the defining feature of additional voluntary deductions is the employee's choice to participate.