What Is a Miscellaneous Garnishment?

A miscellaneous garnishment is a court- or agency-ordered wage garnishment, other than child support, that Arcoro Payroll calculates on an employee's disposable income. Use it when you receive an order to withhold part of an employee's wages for a debt or obligation.

Common examples include:

• Bankruptcy court orders
• Federal or state tax levies and liens
• Defaulted federal student loans
• Creditor garnishments from a court judgment

Garnishments are post-tax deductions. They come out after taxes are calculated, so they reduce the employee's net pay but do not change their taxes.

Important: Arcoro Payroll withholds miscellaneous garnishments from the employee's pay, but does not send the payment to the agency or creditor. Your company is responsible for remitting each payment as directed by the order. Arcoro Payroll only remits child support garnishments on your behalf.

Which Deduction Type Should I Use?

Before You Begin

Have the garnishment order in hand and set up the garnishment before you run the payroll it should apply to. A garnishment is only included on payrolls previewed or approved after it is saved.

From the order, gather:

• The employee the order applies to
• How much to withhold each pay period, either a flat dollar amount or a percentage of disposable income
• The maximum percentage of disposable income that can be garnished, if the order states one
• The total balance owed, if the order states one
• Any annual cap on collections
• The first payday the garnishment should apply
• The order's priority relative to any other garnishments the employee already has

Set Up a Miscellaneous Garnishment

Add the garnishment to the employee's record, choose the miscellaneous garnishment type, and enter the details from the order.

1. In Arcoro Payroll, go to the People tab and select the employee.
2. Select the Benefits & Deductions tab.
3. Add a new post-tax deduction and select Miscellaneous garnishment as the type.
4. Complete the fields below using the garnishment order.
5. Save the garnishment. It applies to every payroll from the start date forward.

Field Reference

Enter either an amount or a percent per pay period, not both. If you enter both a total amount and an annual limit, the garnishment stops as soon as either one is reached.

Manage, Change, or End a Garnishment

Changes only affect future payrolls. Past paid payrolls and payrolls already approved stay as they are.

Update a garnishment. When you receive an amended order, edit the garnishment with the new amount, limit, or priority. You can change every field except the employee. To move a garnishment to a different employee, end it and set up a new one.

Change the amount for one payroll only. You can override a garnishment amount on a single payroll without changing future payrolls. You can also enter a negative amount to refund an employee who was over-garnished on earlier payrolls. The year-to-date total for that garnishment cannot go below $0.

End a garnishment. When you receive a release or satisfaction notice, add an end date with the last payday it should apply. If you entered a total amount, the garnishment ends on its own once that balance is collected.

Delete a garnishment. Delete a garnishment only if it was set up by mistake or no longer applies. Deleting it stops it from applying to future payrolls. Past payrolls, reports, and pay stubs are not affected, and a record is kept for audit purposes.

FAQs

How are miscellaneous garnishments calculated?

Each payroll, Arcoro Payroll withholds child support first, then works through miscellaneous garnishments in priority order until each one is met or its limit is reached.

Order of calculation

1. Child support garnishments are always calculated first, as required by the Federal Consumer Credit Protection Act (CCPA).
2. Miscellaneous garnishments are calculated next, by priority number, with 1 being the highest.
3. Garnishments with the same priority are calculated oldest first, by the date they were set up.
4. Garnishments with no priority set are calculated last.

Limits that apply

• Maximum percent: The most that can be garnished, as a percentage of disposable income. This limit counts everything already garnished in that payroll, including child support.
• Default limit: If you do not enter a maximum percent, the garnishment is limited to the federal CCPA rule: the lesser of 25% of disposable income, or the amount of disposable income above 30 times the federal minimum wage.
• Total amount: The most that can be collected over the life of the garnishment. Once reached, the garnishment stops.
• Annual limit: The most that can be collected in a calendar year. Once reached, the garnishment pauses until January 1.

Who sends the garnishment payment to the agency or creditor?

Your company does. Arcoro Payroll withholds the amount from the employee's pay, but you must remit the payment as the order directs. Arcoro Payroll only remits child support garnishments.

Why was less withheld than the order amount?

The garnishment likely hit its maximum percent of disposable income, often because child support or a higher-priority garnishment used part of that limit first.

Can an employee have more than one miscellaneous garnishment?

Yes. Set up each order as its own garnishment and use the priority field to control the order they are calculated in.

Do I need a priority if the employee has only one garnishment?

No. Priority only matters when an employee has more than one garnishment.

Does a garnishment affect the employee's taxes?

No. Garnishments are taken after taxes, so they reduce net pay only.

What if I set up the garnishment after a payroll was approved?

It will not apply to that payroll. It applies to payrolls previewed or approved after it is saved, starting with its start date.