Reasoning of "Hidden Deductions Calculation" (Analysis #2)


Analysis #2 checks for the improper additional "phantom" deduction as well as any reported improper deductions.  During a paycheck processing an additional deduction which amounts to a "kick back" might be taken and yet this amount may not be shown on this report since the employer would not want to disclose this practice.  If "other" deductions are reported, it is important to verify that they are legitimate and not contrary to the very specific laws and regulations which govern this area. If the "other" box is utilized to report a deducted amount, there ought to be a verification that the deduction is in fact lawful such as alimony or child support.

It is important to realize that should the gross amount for "all projects" include any contributions that are not a part of the deduction base (taxable),  this would render a result different from the net wages paid.  This then negates any value of this important analysis.

hidden deductions