Federal garnishment setup and calculations

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Important reminder!

Licenses for Payroll CS, Trial Balance CS, and Write-Up CS (but not Engagement CS) permanently expired on March 1, 2017. CSA will not include 2017 tax rates or payroll forms, so, for 2017 and beyond, you will need to process payroll in another application. We recommend Accounting CS Payroll and myPay Solutions. For more information, see the following topics.

Federal garnishments are calculated as the lesser of:

For example, if disposable wages are $160.00, the minimum wage is $5.15, and the applicable percent is 25%, the amount of the garnishment is the lesser of:

0.25 x $160 = $40


$160 - ($5.15 x 30) = $5.50

So $5.50 is the amount of the deduction.

In the same circumstances, if the disposable wages are $220, then we have the lesser of:

0.25 x $220 = $55


$220 - ($5.15 x 30) = $65.50

So $55 is the amount of the deduction.

From these examples, we see that the federal garnishments should be an after tax percentage that is after all taxes (the pay item included with Payroll CS is set up that way). Enter the garnishment deduction item percentage in the Item Properties dialog (that corresponds to the 25% in the example above). The calculation will then annualize the deduction and compare it to the amount entered in the Federal Garnishment threshold in the Setup > System Configuration > Payroll Tax Information > Federal > Federal Tax Information dialog (which should be 30 x federal minimum wage x 52). It will take the lesser of the two and "deannualize" it to determine the deduction.

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