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People & Payroll · Definition
Statutory Deduction
A deduction from pay required by law rather than by agreement.
Statutory deductions are those the law compels an employer to withhold and remit — income tax, social security, health insurance and levies — each with its own base, rate and filing deadline.
They rank ahead of voluntary deductions and cannot be varied by agreement with the employee. Late remittance attracts penalties on the employer even though the money was withheld correctly.
Also called
- statutory deductions
- mandatory deductions
Related terms
More in People & Payroll
Statutory Deduction is not just a definition here
People & Payroll runs on this vocabulary every day in AWRA OpsHub — 16 of our 259 glossary terms describe things the platform actually does.