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.
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