Garnishments
A garnishment is a legal order requiring an employer to withhold a portion of an employee's wages and remit them to a third party. OnePayroll tracks garnishments through two related records: garnishment types that define shared rules, and garnishment lines on each employee that specify the individual order details.
Garnishment types
Before you can assign garnishments to employees, you must set up garnishment types. Each type defines the rules that apply to all garnishments of that kind.
To set up a garnishment type:
- Search for Garnishment Types and open the page.
- Select New to create a new type.
- Fill in the fields:
| Field | Description |
|---|---|
| Code | A unique code to identify the garnishment type (up to 20 characters). |
| Description | A description of the garnishment type. |
| Pay Type No. | The pay type used for the garnishment deduction. Only pay types with category Employee Deductions are available. |
| Protected Amount Type | Determines how employee pay is protected from garnishment. Options: blank (no protection), Disposable Pay Percentage, Exempt Amount, or Maximum of Both. |
| Process Together | When turned on, all garnishments of this type are processed together rather than individually during payroll calculation. |
| Allocation Method | When multiple garnishments of this type exist and disposable income doesn't cover all, this determines how the available amount is split. Options: Prorated (divided proportionally) or Equal Shares (divided equally). |
| Benefit | Links the garnishment type to a benefit where the benefit's calculation method is set to Garnishments. |
Tip
Garnishment types are user-defined. You create codes that match your organization's needs, such as CHILDSUP for child support orders, TAXLEVY for tax levies, or CREDITOR for creditor judgments.
Employee garnishment lines
Each employee's individual garnishment orders are recorded as garnishment lines.
To add a garnishment to an employee:
- Open the Employee Card.
- In the Wage Garnishments part on the employee card, select a line to edit or add a new entry.
Alternatively, search for Wage Garnishments to work with garnishments across employees.
Garnishment line fields
| Field | Description |
|---|---|
| Employee No. | The employee this garnishment applies to. |
| Garnishment Type | The garnishment type code, which determines the pay type, protected amount rules, and allocation method. |
| Description | A description for this specific garnishment order. |
| Processing Order | An integer from 1 to 99 that determines the order in which this garnishment is calculated during payroll. Lower numbers are processed first. |
| Start Date | The date when the garnishment becomes active. |
| End Date | The date when the garnishment ends. Leave blank if no end date is known. |
| Agency No. | The vendor (collection agency, court, or government agency) to whom garnishment payments are remitted. Links to the Vendor table. |
| Remittance ID | A reference identifier for the garnishment order (up to 30 characters), such as a case number or court order reference. |
| Calculation Method | How the garnishment amount is calculated: Percentage (percentage of earnings) or Fixed Amount (a set dollar amount per pay period). |
| Amount | The garnishment amount. Represents a percentage (0-100) when the Calculation Method is Percentage, or a dollar amount when set to Fixed Amount. |
| Disposable Pay Percentage | The percentage (0-100%) of disposable pay that can be garnished. Used when the garnishment type's Protected Amount Type is Disposable Pay Percentage or Maximum of Both. |
| Exempt Amount | The dollar amount of pay that is exempt from garnishment (protected). Used when the Protected Amount Type is Exempt Amount or Maximum of Both. |
| Lifetime Limit | The maximum total amount that can be garnished over the life of the order. Once this amount is reached, the garnishment stops. |
| Lifetime Limit Constraint | Controls whether the lifetime limit is required. Default is Required. |
| Employee Notified | Indicates whether the employee has been notified about this garnishment. This field is not editable manually. |
Calculated fields
| Field | Description |
|---|---|
| Pay Type No. | Inherited from the garnishment type. Shows which pay type is used for the deduction. |
| Lifetime Amount Garnished | A running total of all amounts garnished under this order, calculated from posted payroll entries. |
| Protected Amount Type | Inherited from the garnishment type. Shows the protection method applied. |
| Active | Indicates whether the garnishment is currently active based on dates and limits. |
| Benefit | Inherited from the garnishment type. |
Processing order
When an employee has multiple garnishments, the Processing Order field (1-99) determines the sequence. Garnishments with a lower number are calculated first. If disposable income is insufficient to cover all garnishments, earlier-processed garnishments take priority.
Protected amounts
OnePayroll protects a portion of employee pay from garnishment based on the Protected Amount Type set on the garnishment type:
| Protection type | How it works |
|---|---|
| (blank) | No protection applied. The full garnishment amount is withheld. |
| Disposable Pay Percentage | A percentage of disposable pay is protected. The Disposable Pay Percentage field on the garnishment line specifies how much can be garnished. |
| Exempt Amount | A fixed dollar amount is exempt from garnishment, as specified in the Exempt Amount field on the garnishment line. |
| Maximum of Both | Both the disposable pay percentage and exempt amount are calculated, and the method that protects the most employee pay is used. |
Allocation methods
When an employee has multiple garnishments of the same type and the Process Together option is enabled on the garnishment type, the Allocation Method determines how the available garnishment amount is divided:
- Prorated — The available amount is split proportionally based on each garnishment's calculated amount.
- Equal Shares — The available amount is split equally among all garnishments of the same type.
Managing garnishments
Modifying a garnishment
Open the employee's garnishment line and update the fields as needed. Changes take effect in the next payroll run.
Ending a garnishment
Set the End Date on the garnishment line to the date the order expires. OnePayroll stops calculating the garnishment after this date. Keep the garnishment record for historical reference.
Tracking garnishment totals
The Lifetime Amount Garnished field shows the running total of all garnished amounts from posted payroll entries. Compare this to the Lifetime Limit to track progress toward the order's total obligation.
Remitting garnishment payments
Garnishment withholdings post to the GL account configured on the garnishment's pay type. The Agency No. field on each garnishment line identifies the vendor to whom payments should be remitted. Use Business Central's standard vendor payment processes to remit accumulated garnishment amounts to the appropriate agencies.
Best practices
- Set up garnishment types first, then assign to employees. Types centralize rules like protection methods and allocation.
- Use meaningful Processing Order values with spacing (for example, 10, 20, 30) so you can insert new garnishments between existing ones.
- Always set an Agency No. to track which vendor receives the garnishment payment.
- Record the court order reference in the Remittance ID field for audit and compliance.
- Monitor Lifetime Amount Garnished against Lifetime Limit to ensure garnishments stop when the order is satisfied.
- Consult legal counsel for garnishment priority rules, which vary by jurisdiction and garnishment type.