Lesson 2: Personal Taxes - Voluntary Deductions

   Constructing Knowledge

Voluntary deductions are determined by the type of job and what is available to an employee through an employer. Sometimes people will chose a job or career partially based upon the types of benefits made available by a particular company or industry. Often, the benefits a company offers are partially paid by the employer and partially by the employee. The portion the employee pays is considered a voluntary deduction.

Extended health care insurance can be purchased for an employee and his family through company group programs. Dental and eye care coverage are common deductions. Other forms of insurance, such as life insurance, can also be purchased for an employee and his family members.

Some jobs have unions. The fees that are paid to the union can be a deduction.

Other careers offer long term savings plans, beyond CPP. Payments into a voluntary pension plans are deductions as well. Some companies will allow for RRSP (Registered Retirement Savings Plan) deductions.

All of these deductions will appear on a paystub. If you are under the age of 18, you will not likely have any voluntary deductions taken off your gross pay.

   Points to Ponder

It is important to keep in mind that these types of deductions are voluntary. If an employee has voluntary deductions made, the employee should benefit them. For example, if dental coverage is deducted from the paycheque, the employee should go to the dentist regularly to use the coverage that has been purchased.

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