A fixed amount is a fixed amount of money or percentage deducted from each payment, regardless of how much the employee makes. This fixed percentage helps to fund retirement savings plans, such as 401(k)s. Employees may also contribute a fixed rate of their income to other savings or investment accounts.

The fixed percentage is relevant for investment accounts or savings because it allows employees to save money regularly. In addition, each payment can automatically deduct this percentage, making it easy for employees to save money without worrying about making monthly or annual contributions.

Next Steps

Are you wondering how this percentage would affect your savings? Calculate your investment tax deductions with our calculator. Or read more definitions to get a better idea.

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