Payroll formulas for check garnishments

Example 1: The garnishment is 25 percent of disposable income.

Example 2: The garnishment allows the employee a flat $150 amount per pay period. The formula also verifies that the Disposable Income amount is greater than zero. It withholds other deductions such as union dues and dental insurance from the $150.

Example 3: The garnishment amount is stepped and dependent on the week's wages. For example, if the disposable wages are less than $150.00, then the garnish amount is zero. When the disposable wages are between $150.01 and $205.00, then the garnished amount is disposable income minus $150.00. If the disposable wages are greater than $205.00, then the garnish amount is 25 percent.

Example 4: The garnishment calculates for a flat amount but isn’t to exceed a percent of the employee s disposable earnings. For example, the garnishment needs to calculate a flat amount of $200 but not exceed 25 percent of the employee's disposable earnings. The following example equates disposable earnings as gross pay minus employee taxes:

Example 5: An employee has two garnishments, each for a flat amount. The total of both garnishments can’t exceed a set percentage of the disposable income. If the employee doesn’t earn enough to pay both garnishments, it prorates each so that neither calculate the full amount. It still takes both, though.

In this example, B. Jones has two garnishments: GARN1 is a flat amount of $150.00 (60% of the total garnishment amount). GARN2 is a flat amount of $100.00 (which is 40% of the total garnishment amount). The total for both garnishments can’t exceed 25% of the employee's disposable earnings.

The percentages are calculated by adding the two garnishment amounts together in the example below.

Note: Since these formulas are specific to one employee, you can include the employee ID or name in the formula title for ease of identification.

Example 6: An employee has two garnishments, each for a flat amount. The total of both garnishments can’t exceed a set percentage of the disposable income. If the employee doesn’t earn enough to pay both garnishments, then the first garnishment takes priority.

If the first garnishment exceeds the maximum percentage, it should be lowered to accommodate the maximum. When the first garnishment is less than the maximum deduction allowed, it takes the second garnishment. The total of both garnishments equals the maximum percentage.

This scenario applies when one garnishment takes priority over the other from the government office or offices ordering the garnishments. In this example, C. Jones has two garnishments: GARN1 is a flat amount of $150.00. GARN2 is a flat amount of $100.00. The total of both garnishments can’t exceed 25% of the employee s disposable earnings.

Note: Since these formulas are specific to one employee, you can include the employee ID or name in the formula title for ease of identification.

Example 7: The garnishment allows the employee a flat $150 amount per pay period. The formula deducts the garnishment and leaves the net pay of $150. If the net pay before the garnishment is less than $150, it doesn't deduct the garnishment.

Note: The garnishment deduction needs to be sequenced so that it calculates after all other deductions. Add the deduction to the employee setup window as an Auto deduct. Set the Sequence as 1 higher than the highest sequence number on other deductions. If no other deductions have a Sequence, enter 1.

Example 8: The garnishment allows the employee a flat $508.33 amount per pay period. The formula deducts the garnishment and leaves the net pay of $508.33.

This formula is different for every employee who has an IRS Levy. Customize the formula or deduction for each case. For example, deduction "IRS Levy" and employee formula "IRS LevyXX". Or deduction "IRS LevyXX" and employee formula "IRS LevyXX" (XX are the employee's initials).

Note: The IRS Levy deduction needs to be sequenced so that it calculates after all other deductions. Add the deduction to the employee setup window as an Auto deduct with a Calc Method of Formula. Set the Sequence as 1 higher than the highest sequence number on other deductions. If no other deductions have a Sequence, enter 1.

The employee receives a flat 508.33 and the remainder of the check goes to the IRS Levy. This amount can vary based on the employee gross pay, taxes and deductions.