•WARNINGS
•A garnishment is something a court has ordered you (the employer) to withhold and remit on behalf of the court.
•Make sure you fully understand your obligations per the court order.
•If you have any questions or concerns, contact the court and seek advice from a local payroll garnishment expert.
To setup a garnishment calculation:
•On the Setup Screen, select 'Garnish' as one of the deduction types (change one of the items from 'Not Used' to 'Garnish').
•You may wish to enter a 'generic' heading.
•'MISC G' would allow both you and the affected employees to know what the item is for.
•On the employee screens, select the appropriate garnishment type, enter the appropriate amount or percent, enter the maximum dollar amount per check (if needed), and select the deductions which reduce disposable pay (if needed).
•When creating the first paycheck with a garnishment, manually perform the calculations and compare, to make sure you have setup the calculation correctly.
•Along with your other payroll reports, print a Garnishment Report each pay period.
•You can use the Garnishment Report as a 'check off' sheet to note each item was remitted to the court.
Garnishment Types
•None
•The employee is not subject to a garnishment.
•% of Disposable
•The employee has been ordered to pay a certain percentage of their disposable income.
•This could include a maximum dollar amount per check.
•% of Net
•The employee has been ordered to pay a certain percentage of their net pay.
•This could include a maximum dollar amount per check
•% of Gross
•The employee has been ordered to pay a certain percentage of their gross pay.
•This could include a maximum dollar amount per check
•Fixed Dollar Amount
•The employee has been ordered to pay a fixed dollar amount each pay date.
Amount / Percentage
•Enter the amount or percentage of the garnishment.
Maximum Dollar Amount Per Check
•This is the maximum dollar amount per check, not a place to enter the total amount to be garnished.
•If the garnishment is a percentage amount up to a certain maximum dollar amount per check, enter the maximum dollar amount in this box.
Select Disposable Earnings Adjustments
•Click this button to tell the software which deductions reduce disposable income (the amount subject to the garnishment calculation).
•Refer to each court order for details.
Notes
•Medlin Payroll is limited to one garnishment calculation per employee.
•If an employee is subject to multiple garnishments, you will have to calculate the employee's garnishments manually and manually enter the garnishments as miscellaneous deductions.
•Gross and disposable pay in Medlin Payroll does NOT include employee contributions to Cafeteria, Section 125, and Section 132 plans.
•If you offer any of these plans, and the court DOES count these contributions as being subject to the garnishment, you may have to manually calculate and enter the garnishment amount.
•It is possible a court can order a garnishment which cannot be calculated using the methods included in Medlin Payroll Software.
•If the garnishment is a closed ended item - if it stops when a certain dollar amount has been paid - you will need to manually monitor the amount withheld.
•As you get near the total amount, refer to the court order for instructions on calculating the final payment (interest usually accrues).
•If you do not select the items which reduce disposable pay, the default items will be selected:
•Federal Withholding, Social Security, Medicare, State Withholding, and if applicable, CA SDI, NYC WH, NY DBL, IN LWH, and WA L&I.
•Be sure to review the court order and select the proper items.
Examples
•For reference only. Refer to each court order for specific instructions.
Child/Spousal Support
•50% of disposable income
•Maximum of $375 per paycheck
•Disposable income is gross pay less federal and state required deductions
•Select 'Garnish' as one of the deduction types on the Setup Screen.
•On the Employee's screen, select '% of Disposable' as the garnishment type
•Enter '50.00' in the Amt/Pct box.
•Enter '375.00' in the Max box.
•Click the 'Select Disposable' button and check the federal and state required deductions.
Creditor Garnishment
•50% of disposable income
•No maximum per paycheck
•Stops at $5000 plus accrued interest
•Disposable income is gross pay less federal and state required deductions.
•Select 'Garnish' as one of the deduction types on the Setup Screen.
•On the Employee's screen, select '% of Disposable' as the garnishment type
•Enter '50.00' in the Amt/Pct box.
•Enter '0' in the Max box (since there is no maximum per paycheck)
•Click the 'Select Disposable' button and check the federal and state required deductions.
•Keep track of the amount garnished.
•When you get within a few paychecks of the end of the garnishment, contact the court to work out the timing and amount of the last garnishment based on any accrued interest.
Percentage of Net or Gross Pay
•25% of income
•No maximum per paycheck
•Select 'Garnish' as one of the deduction types on the Setup Screen
•On the Employee's screen, select '% of Net' or '% of Gross' as the garnishment type.
•Enter '25.00' in the Amt/Pct box.
•Enter '0' in the Max box (since there is no maximum per paycheck).
•If there is a limit/end to the garnishment, monitor the amount withheld.
•When you get with a few paychecks of the end of the garnishment, contact the court to work out the timing and amount of the last garnishment based on any accrued interest.
Fixed Dollar Amount
•Select 'Garnish' as one of the deduction types on the Setup Screen.
•On the Employee's screen, select 'Fixed Dollar Amount'' as the garnishment type.
•Enter the amount in the Amt/Pct box
•The Max box will be ignored.
•If there is a limit/end to the garnishment, monitor the amount withheld.
•When you get with a few paychecks of the end of the garnishment, contact the court to work out the timing and amount of the last garnishment based on any accrued interest.