Calculate your deduction
What you pay, not the full premium. KFF 2025 averages: $120 single, $571 family.
Use your share of the premium, which you'll find on your benefits enrollment page or your pay stub, not the plan's full price. If you pay for dental and vision too, add them in: they're usually deducted the same way.
How the deduction is calculated
Payroll systems convert your annual premium share into equal amounts per paycheck. The formula is simple: monthly share × 12 ÷ number of paychecks. The number of paychecks is what trips people up.
| Pay schedule | Paychecks per year | Deduction per paycheck |
|---|---|---|
| Weekly | 52 | $27.69 |
| Every two weeks (biweekly) | 26 | $55.38 |
| Twice a month (semimonthly) | 24 | $60.00 |
| Monthly | 12 | $120.00 |
Some employers on a biweekly schedule take deductions from only 24 paychecks and skip the two "extra" paychecks a year. In that case your deduction looks like the semimonthly number. Either way, you pay the same total for the year.
Why pre-tax deductions cost you less
Most employer plans run premiums through a Section 125 "premium only" plan. Your share comes out before federal income tax, Social Security and Medicare (7.65% together), and usually state income tax. That means every dollar of premium only costs you about 65 to 75 cents of take-home pay.
Your employer saves too: it doesn't pay its 7.65% share of payroll tax on the money you contribute. See the Section 125 calculator for the company side.
Is my deduction normal?
- Single coverage: the 2025 average was $120 a month. Many startups pay 100%, so $0 is common at venture-backed companies.
- Family coverage: the 2025 average was about $571 a month, and higher at small firms, which often pay a smaller share for dependents.
- Above about 9.96% of pay for single coverage (10.22% in 2027) may mean the plan isn't "affordable" under the ACA. Check it with the ACA affordability calculator.
Your premium share versus your total health costs
The paycheck deduction is the part of health insurance you pay every month whether or not you see a doctor. Your total cost for the year is that premium plus whatever you pay when you get care: the deductible, copays and coinsurance, up to the plan's out-of-pocket maximum.
When you pick a plan at open enrollment, estimate both a normal year and a bad year. The plan with the smallest paycheck deduction is only the cheapest if you stay healthy.
When your deduction can change
Pre-tax elections are locked for the plan year. You can change them at open enrollment or within 30 days of a qualifying life event such as marriage, a birth or adoption, or losing other coverage. A mid-year jump in your deduction without one of those usually means a payroll error, so ask HR.
See the full list in our guide to qualifying life events.
Reading health insurance on your pay stub
Pay stubs label health deductions differently depending on the payroll provider, which is a big reason people can't tell what they're paying. These are the labels I see most often:
| Label | What it usually means |
|---|---|
| MED, MEDICAL, MED PRE-TAX | Your share of the medical premium, deducted pre-tax |
| DEN, DENTAL / VIS, VISION | Dental and vision premiums, usually pre-tax |
| 125, SEC125, POP | Premiums run through your Section 125 plan |
| HSA, HSA EE | Your own HSA contribution (separate from premiums) |
| HSA ER (memo) | Your employer's HSA deposit, shown for information only |
| Employer health (memo) | What your employer pays toward the premium; not taken from your pay |
| FSA, MED FSA | A health flexible spending account election |
Box 12 of your W-2, code DD, shows the total cost of your employer coverage, both your share and your employer's. It isn't taxable; it's there so you can see what your health benefit is worth. For many people it's the first time they realize their employer pays $8,000 to $20,000 a year for their insurance.
For employers: explaining deductions to your team
Most benefits questions HR teams get in the first month of a plan year are about paychecks: why did my deduction change, why is it different from what the enrollment site said, and why is my take-home pay lower than I expected. A short note at open enrollment heads most of them off.
- Show the per-paycheck amount, not just the monthly premium. Employees think in paychecks. Use the same number of pay periods your payroll system uses.
- Say whether deductions are pre-tax. If they are, show the estimated take-home effect too, so the smaller net change isn't a surprise.
- Explain the first paycheck. If coverage starts mid-month or deductions are taken in arrears, the first deduction can be larger. Say so in advance.
- Show what the company pays. Employees rarely know their employer pays $650 to $1,700 a month for their coverage. Putting it next to their own deduction makes the benefit visible.
If you're choosing between contribution strategies, the employer cost calculator shows how each split changes both the company's cost and what employees pay.
For employers: making the deduction smaller
If you run a company and your team's deductions feel high, the cheapest fix is usually a lower premium, not a bigger employer contribution.
See what your team would pay with Prescience
Answer a few questions about your team and get a quote in about 60 seconds, or talk it through with one of our benefits experts.
