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 If you owe someone money, or are order by a court to send money to another party as part of a legal settlement, you could be at risk for wage garnishment. Laws dealing with wage garnishment are aimed at both ensuring the party owed money receives payment, as well as offering protection against excessive garnishment of wages.
In this publication, we're going to talk about the topic of wage garnishment. As part of that discussion, we'll first talk about the term itself, typical debts associated with this process, and the procedure employers must follow when enforcing a court-ordered garnishment. Next, we'll explain the protections offered under the law to those subjected to this process, including the limits of garnishment. Finally, we'll tell you how you can use our online calculator to figure out the impact of garnishment on your paycheck.
Garnishment
The term garnishment refers to the act of an employer withholding part of an employee's wages so the money can be sent to a court of law, or to a winner of a lawsuit against this employee. While garnishment can be associated with any kind of debt, the most common examples include:
Employers and Garnishment of Wages
As mentioned earlier, garnishment involves a court order directing an employer to withhold money from the debtor's paycheck. That order will typically be sent to the employer's Human Resources department, and then delivered to the Payroll department to ensure deductions are made from the employee's paycheck.
The order will describe both the amount to be withheld each pay period as well as the total amount of debt to be repaid. Only the issuer of a garnishment order has the legal authority to modify these payment terms and / or withdraw the order.
Employers can charge nominal administrative fees for carrying out the order. However, under the law no employer can discharge an employee because their earnings have been subjected to garnishment. In other words, the employer does not have the right to terminate the employee just because they're indebted to another party.
Garnishment orders may contain a waiting period provision that allows the employee to request alternative arrangements. Once this waiting period has expired, deductions from each paycheck will begin.
Garnishment Limits under the Law
Under federal law, there are limits to the amount of money that can be garnished in any given pay period. Generally, the limit is the lesser of:
- 25% of the employee's disposable pay, or
- The amount of disposable pay in excess of 30 times the federal minimum wage, or
- 15% of the employee's disposable pay in cases involving student loans
Disposable pay is usually defined as gross pay minus legally-required deductions such as federal and state income taxes, Social Security, Medicare, and involuntary retirement payments. The Department of Education's calculation also allows a deduction for health insurance premiums.
Employees are allowed to shelter 30 times the federal minimum hourly wage each week. The table below shows these limits based on pay frequency and a federal minimum wage of $7.25 per hour.
| Pay Frequency |
Minimum Wage Credit |
| Weekly |
$217.50 |
| Biweekly |
$435.00 |
| Semi-Monthly |
$471.25 |
| Monthly |
$942.50 |
Greater amounts of an employee's pay can be garnished in cases involving bankruptcy, child support, and income tax payments. In cases involving child support, 50% of the employee's disposable pay can be withheld if the employee is also supporting a "current" spouse or child. If the employee is not supporting a "current" spouse or child, then 60% of disposable pay can be garnished. In addition, if the employee falls behind on their child support payments for more than 12 weeks, an additional 5% can be added to the wage garnishment order.
Finally, if the debtor lives in a state where the garnishment law differs from the federal standard, the employer must abide by the law that results in the smaller garnishment.
Garnishment Calculator
We have an online garnishment calculator that can be used to estimate the amount of wages withheld from a paycheck. That calculator provides results for both the U.S. Department of Labor calculation, as well as the method used by the U.S. Department of Education. A link to that tool is found here - Wage Garnishment Calculator. The calculations performed are limited to the 25% of disposable pay standard, and does not account for individual cases where bankruptcy or child support decisions apply.
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