If you receive a court-ordered wage garnishment order or tax levy for an active employee, you're legally obligated to withhold the employee's wages. These orders have specific guidelines that determine the amount you withhold and the way you handle multiple garnishments.
A garnishment is an order by a court, the federal government, or a state agency for an employer to withhold wages from an employee's pay and send the money to an agency or creditor. The order might also let you add an administrative fee to the employee.
Other names used to refer to a garnishment order include "earnings withholding order," "federal tax levy," "support order," "bankruptcy order," "writ of garnishment," or "garnishment summons."
If you receive a garnishment order or levy for an employee, make sure you set it up correctly in Intuit Online Payroll so that the withholdings are calculated as stated in the order.
The order will provide the following information:
Depending on the type of order (Federal Tax Levy, child spousal support order, or other type of order), make a note of the following information, which you'll enter when you set up the order in Intuit Online Payroll:
When you set up a garnishment, we calculate the garnishment amount based on the type of garnishment and the employee's disposable income after you take out taxes and exempt deductions.
We determine disposable income based on:
For details about setting up a garnishment order, see Setting up a garnishment.
You're legally required to send wages to the agency on behalf of your employee according to the schedule defined in the garnishment order. While we don't remind you when it's time to send the garnished wages to the agency, we do remind you about the amount to send on the Deductions and Contributions Report:
(Or choose Reports and then under Employee Reports, click Deductions and Contributions.)
When you set up the garnishment, make sure to include the agency name as well as the employee's name in the description to help remind you who to send the garnished wages to.
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