One deduction can change more than one paystub figure
A traditional employee 401(k) deferral normally reduces wages subject to federal income tax. It generally does not reduce the wages subject to Social Security and Medicare. This is why your W-2's federal wages and Social Security wages can differ even when both are based on the same job.
A simplified $100 contribution example
Suppose your gross paycheck is $2,500 and you defer $100 into a traditional 401(k). For an otherwise typical employee, that $100 generally reduces the amount used in the federal income tax calculation while remaining within the Social Security and Medicare wage bases. Your immediate take-home pay also falls because the contribution is money directed into retirement savings, not money deposited into your checking account.
Roth 401(k) works differently
Designated Roth 401(k) contributions normally use money that has already been included in federal taxable wages. They do not provide the same immediate federal-income-tax exclusion as traditional deferrals. Both kinds of contributions can be subject to payroll tax. Employer matching contributions and special plan types follow their own rules.
What about health insurance premiums?
Some employer-sponsored health coverage and flexible spending arrangements are paid through qualifying Section 125 plans. These amounts can generally reduce federal taxable wages and, depending on the plan and benefit, Social Security and Medicare wages. That difference matters, so our paycheck tool separates traditional 401(k) from qualifying Section 125 deductions rather than grouping everything under one unlabeled “pre-tax” number.
Limits and personal circumstances
Employee contribution limits, catch-up rules, plan eligibility, state tax treatment, and additional W-4 settings vary. A simplified calculator cannot verify whether a particular contribution exceeds a plan or legal limit. Always check your benefit election, payroll department and official tax guidance. The IRS 401(k) plan resource provides general information.
Try the 2026 US Paycheck Calculator and expand Advanced options to add a traditional 401(k) deduction per pay period.
This guide is educational, not individualized tax or legal advice. Updated November 9, 2026.