An employee has to earn at least 30 times the current federal minimum wage in a week before a creditor can garnish his wages. Anything the employee earns over 30 times the federal minimum wage is subject to a maximum 25 percent creditor garnishment. Different garnishment rules apply to federal student loans and past due child support.
Garnishment Calculations
To calculate whether an employee earns adequate wages for garnishment, multiply the current federal minimum wage by the number 30. This will give you the minimum amount an employee must earn before a garnishment is allowable. If, after taking out state and federal tax deductions, the wages earned are equal to 30 times the minimum federal wage, the employee's wages are not subject to garnishment. Any wages earned over 30 times the minimum federal wage are garnishable.
Creditor Garnishment Maximums
If the employee's wages are subject to garnishment from a creditor such as an unpaid credit card bill or car loan, then the maximum percentage garnishable is 25 percent of the employee's disposable earnings. Disposable earnings calculations allow for state and federal tax deductions from gross earnings. If the employee has voluntary deductions such as group health insurance, short-term disability or long-term disability, these are not allowable deductions from gross earnings for garnishment purposes.
Back Child Support Maximums
The garnishable wage limits of 30 times the federal minimum wage applies to back child support payments or child support arrears, but the amount garnishable is not limited to 25 percent. If the employee is currently supporting a spouse or children, then 50 percent of his disposable earnings are garnishable to pay past due child support. If the spouse is only supporting herself and has no other spouse or children she is supporting, then the maximum amount of her wages that are garnishable is 60 percent.
Federal Student Loan Maximums
If the employee defaults on his federal student loans, the maximum allowable garnishment percentage is 15 percent of disposable earnings. Unlike creditor garnishments and child support orders, the U.S. Department of Education does not need a court order to garnish wages. The garnishable wage amount of 30 times the current federal minimum wage still applies to federal student loan garnishments. However, if the employee has other garnishments, the total percentage of garnishment amounts cannot be more than 25 percent of disposable earnings.
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