Resolution

Reconciliation steps for a Creditor Garnishment with an example:

Determine the Disposable Income Percentage.
1. This is defined in Employee Deductions (Payroll>Employee Maintenance>Employee Deductions) on the Garnishment tab as 25%
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)
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)
Find Total Garnishments Already Taken
1. This employee has no other garnishments taken
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)
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)
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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