What is a garnishment?
Garnishments are amounts that are automatically deducted from employee paychecks to pay for outstanding debts to government, and state agencies, and sometimes private organizations.
Examples of unpaid debts that can be collected through garnishments include:
- Child Support
- Federal Tax Levy
- State Tax Levy
- Creditor Garnishment
- Spousal Support
- Defaulted student loan
Federal and State tax agencies will levy employee wages for unpaid and outstanding tax debts, e.g., from a failure to file a return or correctly report income on a return.
Do garnishments require court orders?
In general, private creditors (e.g., those seeking to recover unpaid credit card or medical bills) must sue for the right to request a garnishment order. Alimony payments cannot be garnished without a court order.
However, some types of garnishments do not need a court order:
- Child support orders, including health insurance deductions for mandatory enrollment of a dependent, automatically include garnishment orders.
- Federal (e.g., the IRS) and State tax agencies do not need court orders to collect unpaid taxes through garnishments and levies.
- Private and government agencies also do not need court orders to recover payments on defaulted Federal student loans through garnishment
You may contest the terms of a garnishment order, e.g., to provide proof that the amount of garnishment is too great, but cannot refuse to honor a garnishment order or tax levy.
What types of garnishments does Zenefits Payroll support?
Here's a list of garnishments that can be added to individual employees in Zenefits Payroll.
- Child Support
- Defaulted Student Loan
- Federal Tax Levy
- State Tax Levy
- Spousal Support
- Creditor Garnishment
If an employee has multiple garnishments, the garnishments are prioritized by category. Make sure to pick the correct category when adding a garnishment so that Zenefits Payroll correctly prioritizes each garnishment.
How do I determine exempt wages for garnishments?
For garnishment purposes, exempt wages are equivalent to the amount earned in a week by an employee who is paid minimum wage. They're "exempt" because they are the portion of an employee's disposable income that is excluded from garnishments so that no matter how much an employee's garnishments are, they can still take home at least minimum wage.
The exempt wages set by each state are usually provided as weekly amounts, which is convenient for employees who are paid each week. Here's how to calculate the exempt wages for employees paid by other schedules:
- For employees paid monthly, multiply the weekly exempt wage amount by 52 (weeks in a year), then divide by 12.
- For employees paid biweekly, multiply the weekly exempt wage amount by 52 (weeks in a year), then divide by 26.
- For those paid semi-monthly, multiply the weekly exempt wage amount by 52 (weeks in a year), then divide by 24.
Sequencing and Prioritizing Wage Garnishment Orders
When an employee who lives in any state other than Mississippi (learn more) has multiple garnishments at the same time, the garnishments are prioritized by type. Here are the priorities for each type in all states except Mississippi.
|2||Chapter XII bankruptcy|
|3||IRS tax levies|
|4||Federal agencies other than IRS|
|5||State tax levies|
|6||Local tax levies|
|7||Consumer (creditor) debt|
What is allowable disposable income for child support garnishments?
The following is a guide for calculating the amount of allowable disposable that may be garnished during a worker's pay period.
Allowable disposable income is calculated by multiplying a worker's disposable income by the CCPA percentage limit. (Allowable Disposable Income = Disposable Income x CCPA % Limit)
Allowable disposable income is the most a worker’s wages may be garnished. The amount that can be garnished is dependent on disposable income and the Consumer Credit Protection Act (CCPA) percentage limit. This in effect sets a maximum limit on the percentage that may be garnished in a pay period.
CCPA % limit is an amount determined at a federal level and sets the maximum percentage that may be garnished. For more information, see the article linked here.
Disposable income is the portion of an worker’s paycheck that is subject to garnishments. Taxes and legally-required deductions don’t count towards disposable earnings. Voluntary deductions such as 401( k ) contributions and health and life insurance are generally considered part of disposable income. These restrictions may vary by state; each court order for child support should cite any applicable state regulations. (Disposable Income = Gross Pay - Allowable Deductions)
Wages that are eligible for garnishments include any normal pay, as well as any commissions or bonuses a worker may receive.
Determine Disposable Income
You may use the table below to help determine a worker’s disposable income.
Directions for calculating disposable income:
- Enter the gross pay in box 1
- Enter the amount of each allowable deduction in boxes 2 - 7
- Enter the sum of boxes 2 - 7 in box 8
- Subtract line 8 from line 1 and enter the amount in box 9.
- The amount in line 9 is the disposable income
|2||Federal Income Taxes|
|3||Social Security and Medicare taxes|
|6||Health insurance premiums*|
|7||Involuntary retirement or pension plan payment*.|
|8||Allowable deductions (Add lines 2 through 7)|
|9||Disposable Income (Subtract line 8 from line 1)|
*If allowed by the garnishment order, or work state regulation.
See this Help Center Article on How to add Garnishments in Zenefits Payroll for more information.
NOTE - Zenefits is unable to advise on exactly what a customer should select when adding a garnishment. The information entered should be based strictly off of the garnishment order and any questions should be directed to the issuing jurisdiction.
What is a levy?
Levies are a type of garnishment that usually refer specifically to unpaid taxes. A tax levy grants the IRS permission to seize property and wages to satisfy a debt.
Does Zenefits Payroll remit garnishments to third party agencies?
At this time, Zenefits can remit select garnishments to select agencies. To learn more about your company's eligibility for this, please contact Zenefits Customer Care.
To see if Zenefits will be remitting child support garnishments for your worker, take the following steps:
- Go to the Payroll app from your admin dashboard.
- Click on the People tab.
- Click Show Details next to the individual with the garnishment.
- Scroll down to the Garnishments section and click the pencil icon.
- Check Service Level to see if it is set to Calculation Only or Full Service.
*If you cannot switch to Full Service, this garnishment is not eligible to be remitted by Zenefits at this time.
How can I edit the default disposable income calculation?
Administrators can reduce the disposable income for a worker's garnishment by selecting allowable worker deductions. These deductions will be taken from a worker's pay first, before any garnishments are calculated.
Please note that disposable income calculations will vary by the individual's work state.
What is a case identifier for child support garnishments
The case identifier, or CSE Case Number, is a unique number on every court-ordered garnishment. This is often printed on the very first page of the order.
Please note: Entering an incorrect case number may result in payments being applied incorrectly by the state. If you have entered an incorrect case number, contact the state immediately to ensure any previous payments have not been incorrectly applied, and correct the information in the Zenefits system.
What is a FIPS or Locator Number?
The Federal Information Processing Standard Publication 6-4 or FIPS, is a five digit code which uniquely identifies counties and equivalents in the United States. It is used to properly identify child support payments. Some states require the FIPS number, so if it's printed on the order, make sure to include it here. To look up a FIPS number, click here.
What is a CCPA Limit?
The Federal Consumer Credit Protection Act, or CCPA, governs the amounts allowed based on the state regulations of the employee's principal work location. Typically, each court order for child support will cite the applicable state regulations.
The combined support amount and fee may not exceed the limit indicated. For more information on each state's limits, visit this page.
Adding an Admin or Employer Fee
Many states permit an employer to withhold a fee to compensate for the administrative cost of processing a garnishment order, as long as it complies with the CCPA limit.
For more information on state specific rules, see below.
Federal: None. But the application of state or locally authorized administrative fees must not reduce a worker's earnings below the minimum wage or overtime pay required by the FLSA.
Alabama: Up to $2 each month for support withholding, deducted from worker's income.
Alaska: $5 for each support payment, deducted from the worker's remaining wages.
Arkansas: Up to $ 2 .50 each pay period for support withholding, deducted from the worker's remaining wages.
California: Employers may deduct $ 1 .50 for each support payment from the employee's earnings.
Connecticut: Employers may deduct up to $5 each month for support withholding from the employee's remaining wages.
Colorado: None identified.
Delaware: None identified.
Florida: Employers may deduct up to $5 for the first, and $2 for each later support payment from the employee's remaining wages.
Georgia: Employers may deduct up to $25 for the first, and $3 for each later support payment from the employee's remaining income.
Hawaii: Employers may deduct up to $25 for the first, and $3 for each later support payment from the employee's remaining income.
Idaho: Employers may deduct up to $5 for each support payment from the employee's remaining income.
Illinois: Employers may deduct:
- 2% of the amount garnished from the employee's remaining wages.
- $12 for each wage assignment, credited against the employee's outstanding debt.
- Up to $5 each month for support withholding from the employee's remaining income.
Indiana: Employers may deduct:
- $2 for each support payment from the employee's remaining disposable earnings, and
- $12 or 3% of the total deduction for a single debt. If 3%, the employer deducts half from the employee's remaining income and half from the amount withheld for the creditor. Collection may be in lump sum or pro rata over all affected pay periods.
The same fee is available for state tax debt withholding, but is paid entirely by the employee.
Iowa: Up to $2 each month for support withholding.
Kansas: Up to $10 for each pay period or $20 for each 30-day period. If the fee causes the total withholding to exceed the statutory limit, the fee is instead deducted from the amount withheld.
Up to $5 for each pay period or $10 for each 30-day period for support withholding. If withholding is from a lump sum payment, the employer may charge an additional $10 fee.
Kentucky: $1 for each support withholding payment.
Maine: For wage garnishment, $3 for each pay period deducted from the employee's remaining nonexempt income.
Maryland: For wage garnishments, $1 for each payment deducted from the amount withheld for the creditor. $2 for each support payment, deducted from the employee's wages.
Massachusetts: $2 for each support payment, deducted from the worker's remaining wages.
Michigan: Employers may deduct up to $1 each pay period for support withholding from the employee's earnings.
Minnesota: Creditors must pay employers a $35 fee for each garnishment served.
For support orders, if the employer submits withholdings electronically, it may collect a fee of $1 for each payment, up to $2 each month, from the employee's remaining wages. If withholdings are not submitted electronically, $2 for each payment, up to $4 each month.
Mississippi: Employers may deduct up to $1 for each support payment from the employee's remaining wages.
Creditors must provide a $15 fee when serving summons and order of garnishment.
Missouri: $2 for each intrastate support payment, deducted from the employee's remaining income (fees for interstate withholding are governed by the state where the employee works).
A monthly fee up to $15 on behalf of the state, deducted from the employee's income.
Montana: Up to $20 for answering garnishment interrogatories, deducted from the employee's other nonexempt wages. Employers may move for additional costs. For support orders, up to $6 each month, deducted from the employee's other wages.
Nebraska: Up to $5 each month for support withholding.
Nevada: For support orders, up to $ 2 .50 each month (set by the court), deducted from the amount withheld.
New Hampshire: $3 for each support payment, deducted from an employee's wages.
New Jersey: $1 for each medical support withholding, deducted from the employee's remaining wages.
New Mexico: $1 for each support payment, deducted from the employee's remaining wages.
For other garnishment orders, 5% deducted from each payment to a creditor.
New York: $1 for each support payment, deducted from the employee's income.
The court awards employers their actual costs and reasonable attorneys' fees for the employer's response in garnishment proceedings.
North Carolina: None identified.
North Dakota: $1 or $2 (depending on the type of withholding) for each child support payment, deducted from the employee's remaining income.
Ohio: $3 each month for child support withholdings, deducted from the employee's income.
Creditors must include a $25 fee when serving a garnishment order.
Oklahoma: For support withholdings, $2 or 1% of the amount withheld (whichever is greater), deducted from the employee's remaining wages.
For other orders, up to $3 each pay period, deducted from the employee's remaining disposable earnings.
Oregon: Up to $5 each pay period, but not more than $10 each month, for support withholdings, deducted from the employee's wages.
$10 for answering a garnishment summons, deducted from the employee's wages.
Pennsylvania: A one-time fee of $50 for support withholding, deducted from the employee's income.
Up to $5 for withholdings for residential lease debt, taken from the amount collected.
Rhode Island: $5 for each garnishment order, deducted from the employee's wages.
$2 for each support withholding, deducted from the employee's remaining wages.
South Carolina: $3 for each child support withholding, deducted from the employee's remaining wages.
South Dakota: Up to $3 each month for support withholding, deducted from the employee's remaining wages.
$15 from creditors for each garnishment order.
Tennessee: Up to 5% (presumably of the amount withheld) but not more than $5 each month for support withholding, deducted from the employee's remaining wages.
Texas: Employers may deduct from the employee's disposable earnings:
- Student loan debt withholding: the lesser of $10/ month or the actual administrative cost.
- Child support: up to $10/ month .
- Spousal support: up to $5/month.
Utah: For wage garnishment generally, $10 for each single garnishment and $25 for each continuing garnishment, as a one-time fee from creditors.
$25 one-time fee for support withholding, deducted (as a lump sum or incrementally) from the employee's remaining income.
Vermont: Up to $5 each month for support withholding, deducted from employee's wages.
Virginia: Up to $10 for each garnishment summons, deducted from employee's remaining income.
Washington: Up to $20 for the first and $10 for the second answer to a continuing garnishment order from employee's remaining earnings ($20 from creditors for each non-continuing order). Up to $10 for the first and $1 for each later support payment from employee's remaining earnings (even if the remainder of earnings is exempt).
West Virginia: Up to $1 for each support withholding, deducted from the employee's remaining income.
Wisconsin: Up to $3 for the actual cost of each support payment, deducted from the employee's remaining income.
Wyoming: $5 for each support payment, deducted from the employee's remaining income.
Processing Options for Multiple Garnishments
Zenefits offers two types of processing to allocate disposable income to multiple child support orders:
- Equally Split
For specific question about multiple garnishment order received and how you should process, please reach out to the agency in the employee's work state.
How can I download an audit of the garnishments on payroll?
This is available for those on the Zenefits Payroll Garnishments new release
To audit the garnishments you have in Zenefits Payroll, you're able to download the Garnishment Audit Report to view calculations and uncollected amounts, even while the pay run is in a Draft status.
To run a report on all employees who have garnishments set up, you can run the Garnishments Setup Report.
Both of these reports are available under the Reports tab from your Payroll app.
What to do for an "Other Garnishments" Error
If you receive this message when adding a new garnishment for your employee, you must replace the employee's current garnishments using our new setup.
- Make a note of any data on the current "other" garnishment(s) for the employee.
- Delete all garnishment(s) for that employee.
- Pull the garnishment order for each of the existing garnishments that the employee has.
- Set up each garnishment according to the order, drawing from the list of garnishment types in Zenefits.
- Complete the fields in Zenefits as stated on the order.
- Once all fields have been completed, Save.
- Repeat steps 4-6 as necessary for all of the employee's garnishments.