To deduct is to remove or take away some amount. If your boss deducts money from your paycheck because you're always late to work, she subtracts it.
When taxes are withheld from your salary, your employer deducts them to pay your contribution. Each time you use a debit card, it deducts the amount you spend from your bank account. A different way to deduct is to come to a reasoned, thoughtful conclusion, or to deduce. The two words were once interchangeable, while now it's more common to use deduct to mean "remove a portion," and deduce to mean "infer logically."