What type of payments are classified as statutory deductions from gross pay?

Statutory deductions refer to payments that are required by law to be taken from an employee's gross pay. In this context, mandatory income tax and national insurance contributions are essential statutory obligations that employers must withhold from employees' wages.

Income tax is levied on earnings and is a primary source of revenue for the government, while national insurance contributions fund various state benefits, including the state pension and unemployment benefits. Both are mandatory and calculated based on earnings, making them crucial statutory deductions that must be managed appropriately.

The other options provided involve payments that may be optional or not legally required. Optional pension contributions can vary depending on an employee's choice to participate. Childcare vouchers may be offered as a benefit, but they are not statutory. Similarly, charity donations are typically voluntary and not mandated by law. Thus, when considering statutory deductions, mandatory income tax and national insurance contributions are the clear examples that meet the legal requirements for deduction from gross pay.