Traditional 401(k) contributions
Traditional elective deferrals to a 401(k) generally reduce wages subject to federal income tax withholding, but they are generally still included in Social Security and Medicare wages. On a paycheck, that means increasing a traditional 401(k) contribution can lower federal withholding while ordinary FICA may stay unchanged.
This is one reason net-pay changes are not equal to the contribution amount plus a simple tax percentage. The tax savings depend on which wage bases the contribution actually reduces.
Section 125 benefits can behave differently
Qualifying cafeteria-plan benefits can receive different payroll tax treatment. Common eligible benefits can be excluded from federal income-tax wages and, depending on the benefit and plan rules, from Social Security and Medicare wages. Payroll administrators classify the deduction according to the plan, not merely by the employee's label for it.
A simple comparison
Imagine two otherwise identical $3,000 checks. Check A has a $200 traditional 401(k) deduction. Check B has a $200 qualifying Section 125 deduction that reduces both federal and FICA wages. Both may reduce federal taxable wages by $200, but Check B can also have lower Social Security and Medicare withholding. The two net-pay results therefore differ even though the deduction amount is the same.
What to enter in a calculator
Use the category that matches the actual payroll treatment. If you are unsure whether a benefit reduces Social Security or Medicare wages, the best source is the employer's payroll/benefits documentation or the tax treatment shown on the pay stub. Do not assume a deduction is FICA-exempt just because it appears before taxes.
PayCalc separates federal-income-tax-only pre-tax deductions from deductions that also reduce FICA wages so users can model this distinction explicitly.
Traditional and Roth contributions should not be confused
A Roth 401(k) contribution is generally made after federal income tax rather than reducing current federal taxable wages. That is different from a traditional elective deferral, even though both may appear under the same retirement-plan name on an employee benefits portal. If a paycheck calculator treats a Roth contribution as a traditional pre-tax contribution, it can understate current federal withholding.
When reconciling a real paycheck, use the plan's tax classification and the wage boxes on the pay stub or Form W-2 rather than relying only on the marketing label of the benefit.
Official references
These sources are provided so you can verify the rules or concepts summarized above. PayCalc uses primary government sources where they are available.