Wage garnishment is a legal process in which an employer withholds part of an employee’s earnings and sends it to a creditor or agency to pay off a debt. It is ordered by a court, a government agency, or under federal tax authority. Common reasons include unpaid child support, defaulted loans, back taxes, and court judgments.
Wage garnishment redirects a portion of someone’s paycheck to satisfy money they owe. Instead of the employee paying the debt directly, the employer becomes responsible for deducting the set amount each pay period and forwarding it. The deduction appears on the pay stub and lowers the employee’s net pay. Employers must follow the order exactly, because ignoring it can make the company liable for the full debt.
A garnishment usually follows a clear path:
The federal Consumer Credit Protection Act caps how much can be taken. For most consumer debts, garnishment is limited to 25% of disposable earnings, the amount left after legally required deductions like income tax. Child support, alimony, and federal tax debts follow separate, often higher, limits.
Marcus has disposable earnings of $1,200 in a pay period and a court judgment for an unpaid credit card balance. Federal law limits the garnishment to 25% of disposable earnings, so the most his employer can withhold is $300. Payroll deducts that $300, sends it to the creditor, and Marcus keeps the rest. The garnishment is separate from any voluntary pre-tax deductions he already had set up.
Under federal law, most garnishments are capped at 25% of disposable earnings, or the amount above 30 times the federal minimum wage, whichever is less. Child support and tax levies can take more.
Federal law protects employees from being fired over a single garnishment. Protection can weaken when there are multiple separate debts.
Yes. The employee usually receives notice of the underlying judgment or order, and the employer receives the garnishment order that triggers the withholding.
