Pre-Tax vs. Post-Tax Deductions
For some payroll deductions, you may choose to have the deduction taken pre-tax or post-tax in accordance with Section 125 and Section 132(f) of the Internal Revenue Code. These are currently limited to parking permits and several insurance-related deductions. Additional information is provided by HR Benefits.
Pre-tax deductions are taken before Medicare, Federal, and State taxes are calculated thus reducing your taxable income (your tax liability).
Post-tax deductions are taken after taxes are calculated and deducted, so your Federal, State and Medicare tax liability is not affected.