How a paycheck gets from gross pay to net pay

Payroll deductions don't all happen at once, and the order matters because some deductions change what later steps are calculated against. Here's the sequence:

Start with gross wages. This is the full amount earned before anything is taken out.
Subtract pretax Section 125 benefits (medical, dental, vision premiums). These come out before taxes are calculated, and they reduce two different things at once: the wages used for income tax, and the wages used for Social Security/Medicare (FICA) tax. This is what makes them "pretax" — the employee never pays tax on that portion of their pay.
Subtract pretax 401(k) contributions. These also come out before income tax is calculated, but — unlike Section 125 — they do not reduce FICA wages. Social Security and Medicare are still calculated as if that money had been paid out.
Add back imputed income, if any applies (a common example is the taxable value of group term life insurance coverage above $50,000). This doesn't put any money in the employee's pocket — it's a bookkeeping add-back that increases the wage base taxes are calculated on, because the IRS treats that coverage as a taxable benefit even though no cash changes hands.
Calculate and withhold taxes: federal income tax, Social Security, Medicare, and state income tax, all based on the adjusted wage figures from steps 2–4.
Determine disposable earnings. This is gross pay minus only the legally required taxes from step 5 — no other deductions count against this figure. Disposable earnings is a specific legal concept, and it's the number garnishment limits are calculated against.
Apply garnishments, in priority order (e.g., child support before other garnishment types), capped by the CCPA limit — a federal rule that caps how much of someone's disposable earnings can be garnished, regardless of what a court order asks for.
Subtract after-tax deductions: things like Roth 401(k) contributions, voluntary life insurance, or union dues. These come out of pay that's already been taxed.
What's left is net pay — the amount the employee actually receives.

Worked example

Using fictional numbers to illustrate the calculation order:

Step	Amount	Running total
Gross wages	$2,451.00	$2,451.00
Less: Section 125 benefits	–$169.75	$2,281.25
Less: 401(k)	–$147.06	$2,134.19
Less: taxes (federal, SS, Medicare, state)	–$527.52	$1,606.67
Less: child support garnishment	–$350.00	$1,256.67
Less: after-tax deductions	–$76.52	$1,180.15
Net pay		$1,180.15

A couple of things worth noticing in the example: the $350 garnishment is well under the CCPA cap of $961.74, so the full amount ordered gets withheld — if the garnishment order had asked for more than the cap, only the capped amount would come out. Also, the taxes here were calculated on $2,134.19 (gross minus the two pretax deductions), not on the original $2,451.00 gross — that's the practical effect of Section 125 and 401(k) being "pretax."

Note: the imputed income add-back (step 4) doesn't show up as a line item in this particular example — it only affects the tax calculation, not the actual dollars taken from pay, so it wouldn't appear in a deduction table unless the tax math itself is being shown. The figures above are illustrative; the real tax-bracket and CCPA-limit values should be substituted before this is used as reference documentation.