After-tax versus pre-tax
The order of the arithmetic is the whole difference. A pre-tax deduction, such as a traditional 401(k) deferral or a cafeteria-plan health premium, comes off before federal income tax is worked out, so it lowers taxable wages. An after-tax deduction is taken from what is left once the taxes are known.
Roth 401(k) money is the clearest case. The IRS says designated Roth contributions are includible in gross income now and tax-free when distributed, and the 2026 W-2 instructions report them in boxes 1, 3 and 5, with code AA in box 12. The 2026 deferral limit of $24,500 covers Roth and traditional deferrals combined.
Garnishments follow their own rules. DOL Fact Sheet 30 measures them against disposable earnings, the pay left after legally required deductions, and caps an ordinary garnishment at the lesser of 25% of disposable earnings or the amount above $217.50 a week.
One paycheck with a Roth deferral and union dues
Gross pay is $3,000 for the period. The employee puts 5% into a Roth 401(k) and pays $40 in union dues. Federal income tax withheld from the W-4 and Publication 15-T tables is $270 in this example.
| Line | Amount | Running total |
|---|---|---|
| Gross pay | $3,000.00 | $3,000.00 |
| Federal income tax | −$270.00 | $2,730.00 |
| Social security (6.2% of $3,000) | −$186.00 | $2,544.00 |
| Medicare (1.45% of $3,000) | −$43.50 | $2,500.50 |
| Roth 401(k) (5% of $3,000) | −$150.00 | $2,350.50 |
| Union dues | −$40.00 | $2,310.50 |
Taxes were figured on the full $3,000. Had the $150 gone to a traditional 401(k) instead, federal income tax would have been figured on $2,850.
Labelling them on the stub
Many stubs split deductions into two groups, pre-tax and post-tax, so the employee can see which ones changed their taxable wages. Name each line plainly (Roth 401(k), Garnishment, Union dues) and keep a year-to-date column: the Roth figure must reconcile to code AA on the W-2.
Read next
- Pre-tax deductions
- Every deduction on a pay stub
- Wage garnishment limits on a pay stub
- W-2 box 12 codes, including AA
Related terms
Questions
Is a Roth 401(k) deduction pre-tax or after-tax?
After-tax. Roth deferrals stay in the employee's taxable wages, are reported in boxes 1, 3 and 5 of the W-2, and come out of pay after federal income tax is worked out.
Are garnishments taken before or after taxes?
After. Federal law measures a garnishment against disposable earnings, which is pay after legally required deductions such as income tax, social security and Medicare. Voluntary deductions like health premiums are not subtracted first.
Do after-tax deductions lower the taxes on a paycheck?
No. They change take-home pay only. Income tax, social security and Medicare are figured before they are taken, so moving money into an after-tax deduction leaves the tax lines unchanged.
Sources
- IRS: Retirement topics, contributions (read October 8, 2026)
- IRS: General Instructions for Forms W-2 and W-3 (2026) (read October 8, 2026)
- DOL: Fact Sheet #30, Wage garnishment protections of the Consumer Credit Protection Act (read October 8, 2026)
Figures are for the 2026 tax year unless the text says otherwise. This page explains a payroll term; it is general information, not tax or legal advice.