You can only handle a maximum of two garnishments per employee. To manage a Child/Spousal Support garnishment and one other garnishment, like a Federal Tax Levy or Other Garnishment.
Garnishments are calculated from an employee's disposable income, not their gross pay. Disposable income is the amount remaining after mandatory deductions for federal, state, and local taxes.
If you need to handle more than two garnishments, you can use the deduction feature as a workaround. This method involves manually setting up a deduction to remove the correct amount from the employee's paycheck.
But, before you proceed, be aware that it's crucial to consult a tax advisor or a legal professional. They can provide professional guidance and ensure that you remain compliant with all federal and state laws.
To create deductions:
- To the Payroll tab on the left menu, and select Employees.
- Select the employee you need to edit.
- On the employee's profile, scroll down to Deductions and contributions.
- Select Add a new deduction.
- From the Deduction/contribution type dropdown, choose Other deductions.
- For the Type, select Other after-tax deductions.
- Give the deduction a clear description.
- Choose to calculate the deduction as a Flat amount and enter the correct amount.
- Click Save.
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