The three types of deductions typically found on a pay stub are mandatory deductions, voluntary deductions, and pre-tax deductions. Mandatory deductions include federal and state taxes, Social Security, and Medicare contributions, which are required by law. Voluntary deductions are optional and may include contributions to retirement plans, health insurance premiums, or union dues. Pre-tax deductions are taken from an employee's gross pay before taxes are calculated, often for benefits like health insurance or Flexible Spending Accounts, reducing the taxable income.
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