Pre-tax savings are items that get taken out of your paycheck before taxes are deducted. Some examples may include:

  • 401(k) contributions
  • Health Savings Account contributions

Here we might also include extra money from our employers that gets put into savings before taxes are deducted, such as:

  • 401(k) match
  • Health Savings Account match

Ultimately it is up to you to decide which items to track, and whether they constitute savings. For example, you may not want to include Flexible Spending Account contributions this way because they are set aside for immediate spending.

A good rule of thumb is that if the money will be invested inside the account, you will probably want to include it in your savings rate.

Step-by-step Instructions

Record a pre-tax savings item by following these steps:

  1. Click the + button to add a new transaction.
  2. Make sure Income is selected, and not Expense or Transfer.
  3. Add the after-tax paycheck amount. E.g. 500.00 if $500 was the amount after any taxes or deductions.
    1. This amount should not include your pretax items.
  4. Decide whether that money should be available to budget this month or next month.
  5. Click the Pre-Tax Saved toggle.
  6. Enter each pre-tax savings item, along with its dollar amount.
  7. Save the transaction.
  8. Check the budget in the month you allocated the income to (This or Next Month).
    1. You should see a nonzero Pre-Tax Saved amount in the budget summary.

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