Learn how to follow wage garnishment orders using QuickBooks Online Payroll and QuickBooks Desktop Payroll.
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.
If you receive a court-ordered wage garnishment order or tax levy for an active employee, you're legally bound to withhold the employee's wages. These orders have specific guidelines that determine the amount you withhold and the way you handle multiple garnishments
Step 1: Determine what type of garnishment you have
The type of garnishment you have will determine how you add it to your QuickBooks. There are several types of garnishments including:
- Federal and state tax levies
- Child or spousal support withholding orders
- Federal and state student loans
- Federal agency debt orders (non-tax)
- Creditor garnishments
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."
Step 2: Add the garnishment to QuickBooks
Add a garnishment that is deducted from an employee's disposable income. Follow these steps for your payroll service.
|Note: Not sure which payroll service you have? Here's how to find your payroll service.|
Step 3: Pay the garnishment to the appropriate agency
You'll need to make the payments directly to the agencies or creditors as instructed in the garnishment order or tax levy.
For information about how to make the garnishment payment see:
- QuickBooks Online Payroll: Create and record checks in QuickBooks Online
- QuickBooks Desktop Payroll: Pay your non-tax liabilities in QuickBooks Desktop Payroll