---
title: What are Payroll Deductions?
description: Montana law limits wage deductions to legal or employee-authorized reasons. Learn what’s allowed, what’s prohibited, and how to comply with pay statement rules.
---

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December 23, 2025

# What are Payroll Deductions?

## Legal Wage Deduction Policies for Montana Municipal Employers

In general, deductions from wages are lawful only under the following conditions:  
1\. The employer is required to do so by law – for example, federal and state taxes, Social Security, or a   
3\. Governing the Municipality 115 garnishment order.  
2\. The employee has authorized in writing and the deduction is for the employee’s benefit.  
Employers must furnish itemized pay statements to each employee at the time of payment of wages showing all deductions for the pay period. If the employee has no deductions, the employer still needs to give a statement to the employee. The employer cannot withhold wages or make an employee pay for damages, mistakes or shortages. See Attorney General Opinion 17, Volume 36 and Attorney General Opinion 25, Volume 11 at the following website.

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Resources prepared by the MSU Extension Local Government Center are intended for educational purposes only and do not constitute legal advice. For interpretation or application of the law, please consult qualified legal counsel. The Montana State University Extension Service is an ADA/EO/AA/Veteran’s Preference Employer and Provider of Educational Outreach.

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