Reconciling Creditor Garnishment Amounts in Payroll

How can I verify an employee with both creditor and child support garnishments is being withheld correctly? 

• Payroll

• Deduction and Benefit Master

• Payroll Control Settings

• Employee Deductions 

Reconciliation steps for a Creditor Garnishment with an example:

1. Determine the Disposable Income Percentage.

   1. This is defined in Employee Deductions (Payroll>Employee Maintenance>Employee Deductions) on the Garnishment tab as 25%

2. Calculate the Minimum Pay Per Week.

   1. Min Wages are found in Payroll>Payroll Setup>Payroll Control Settings.

   2. Category is Default Numbers and the Labels are Federal Minimum Hours and Federal Minimum Wage.

   3. This deduction uses the Federal Minimum Wage ($7.25) and the Federal Minimum Hours (30) to calculate $217.50 (7.25 x 30)

3. Calculate the Minimum Pay Per Payroll

   1. This employee is paid biweekly, so the payroll spans two weeks, making this vale $435.00. (217.50 x 2)

4. Find Total Garnishments Already Taken

   1. This employee has no other garnishments taken

5.  Calculation 1: Calculate the amount of income that exceeds the Minimum Period Pay, minus any garnishments already taken 

   1. Deduction Gross minus minimum pay per payroll minus 0 since no garnishments were taken ($1,150.39 - $435.00 - $0 = $715.39)

6. Calculation 2: Calculate a percentage of the employee’s Disposable Income, minus any garnishments already taken

   1. Deduction Gross minus the Disposable income in Employee Deductions minus 0 since no garnishments were taken ($1,150.39 * 25% - $0 = $287.60)

7. Calculation 3: Use the smaller amount from calculations 1 and 2 in steps 5 and 6 above.

   1. Calculation 2 is less than Calculation 1 so Calculation 2 is the amount withheld, $287.60

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