A percentage deduction takes a certain percentage of the gross pay from each check up to an optional limit. Most tax deductions are percentage deductions. For example, FICA deductions take 6.7 percent of gross pay on the first $35,700 each year. This deduction would appear as follows:
This type of deduction differs from the first in that the deduction can be an employer or employee deduction. For this reason, the expense ledger and account must be specified.