OnPay handles garnishments from employee post-tax wages, while creating a record for your bookkeeping. Keep in mind that OnPay does not issue payment to the agency in any form. It is still your responsibility to remit payment via check, ACH, or online. Learn more about wage garnishments.
Garnishment and Levy laws differ from state to state, so be sure to:
- Always refer to your notice of income withholding for what’s required
- Always pay the withholding amount on time
- Always notify the agency if the employee is terminated for any reason
What we’ll cover
- Getting started
- Designating an agency
- Name and case number
- Max allowable percent per run
- What are disposable earnings?
- Total owed and remaining balance
- Setting up a levy
- Updating and deactivating garnishments and levies
- Priorities of Withholding Orders
Getting started
Go to the employee profile, either in your Dashboard under “My Team”, or in Workers.
Click Job, then Garnishments. Any existing Child Support deductions or Garnishments for this employee will be listed here.
Click the blue (+) at the bottom of “Garnishments” to add a deduction.
Designating an agency
Type the name of the agency to add it. Agencies you’ve used in the past are available for autofill.
Confirm mailing address
Add and confirm the address of the agency. This should be the exact same address as where you mail the garnishment / levy check for this employee.
Note: OnPay does not issue checks to the agency. It is your responsibility to remit payment via mailed check, ACH, or online.
Click Garnishment. We’ll cover setting up a Levy next.
Name and Case Number
You will always be able to identify this deduction by its name and case/court order number. The name is for your own reference, and you can rename this deduction at any time.The case number or court order number can be found on your notice of income withholding, and you will need to note this number on each check you mail to the agency for this employee’s case.
Max allowable percent and percent per run
The notice of income withholding that you received will detail the percentage of their pay to be deducted per pay run, and the maximum percentage of disposable earnings that can be deducted from the employee’s pay. In general it's 25%, or the amount of disposable earnings that exceeds 30 times the minimum wage, but may be different for certain types of garnishments such as bankruptcy, or recovering taxes. If your notice states an exact dollar amount instead of a percent, you can choose Amount Per Run.
What are disposable earnings?
“Disposable earnings” are the amount of pay remaining after all legally required deductions have been taken, but before any elected deductions are applied. When the percentage of “disposable earnings” is calculated, it will include the value of elective deductions such as health insurance, or employee stock plans. Earnings could include hourly or salary pay, bonuses, and commission. Tip income is generally exempt from garnishments.
Total Owed and Remaining Balance
Per Title III of the Consumer Credit Protection Act, the maximum amount that may be garnished in any pay period may not exceed the lesser of two figures:
- 25% of the employee’s disposable earnings, or
- The amount by which an employee’s disposable earnings are greater than 30 times the federal minimum wage
Enter the total owed as stated on your notice of withholding for the employee. If no payments have been made yet, enter the same figure for “Remaining Balance”. As you process pay runs that include this garnishment, the remaining balance will automatically recalculate. When it reaches zero, the deductions will stop processing.
Click Add when you’ve finished to add this deduction to the employee’s profile.
Setting up a levy
If you have been instructed to set up a levy, you’ll need to indicate the “Amount Exempt” from being levied. This is the amount of pay the employee will take home, after the levy is applied.
When you received your notice of withholding, it typically includes a document with multiple charts to use to determine the amount exempt from this deduction. This document will have various required amounts based on the employee’s filing status, their dependents, and your pay cycle.
Follow these steps to use this document:
- Look for the filing status of the employee and reference its chart
- Look for the column that corresponds with how many dependants they claim
- Look for the row that corresponds with your pay cycle
In the example below, your employee’s filing status is single, they have one dependent, and are paid every two weeks. From this, you can determine that the exempt amount is $642.30.
Enter the dollar amount from the chart into the “Amount Exempt” field.
Click Add when you’ve finished to add this deduction to the employee’s profile.
Updating and deactivating garnishments and levies
View or change the information for garnishments and levies at any time. You can also indicate if it’s not Active to pause or end a garnishment or levy.
Click Edit Agency if you need to correct the name or address of the agency where you send payments.
Note: OnPay does not issue payment to the agency in any way. It is the employer’s responsibility to remit payment via check, ACH, or online.
Priorities of Withholding Orders
- Child support
- Bankruptcy
- Federal administrative garnishments*
- Federal tax levies*
- Student loan**
- State tax levies
- Local tax levies
- Creditor garnishments
- Employer deductions (e.g., for benefits)
- Employee voluntary deductions
*All deductions in effect when a federal administrative garnishment or federal tax levy is received have priority over the order.
**The law provides no guidance, but the Department of Education allows child support to have priority.
v6.0ps