Wage Garnishment Calculations, Restrictions and Consumer Rights
Wage garnishment is based on a person’s "disposable earnings," which is the amount left after legally required deductions are made. Examples of these legal deductions are federal, state, and local taxes, state unemployment insurance, social security and withholdings for employee retirement systems required by law.
Any voluntary deductions not required by law are not exempt when it comes to determining your disposable income. Some of these include health insurance, retirement plans contributions and union dues.
The maximum weekly wage garnishment may not exceed 25% of the debtor’s disposable income, if the income is over $206.00 – thus in this case a person would receive (.75 * 206.00) of their wage which is $154.50. If the debtor’s income is less than 30 times the minimum federal hourly wage ($5.15) then there can be no garnishment, thus a disposable income of $5.15 * 30 = $154.50 or less cannot be garnished.
The Department of Labor offers the following examples and calculations:
If an employee has a gross income of $240.00 per week and has disposable income of $210.00 then – 25% of the person’s wages can be garnished for a total of (.25 * $210.00) = $52.50.
If the employee is paid on a biweekly basis then 25% of the amount over $412.00 can be garnished.