A wage garnishment notice arrives in the payroll inbox and starts a small compliance crisis. The employer has to withhold a specific amount from the employee's wages, remit it on a specific schedule to a specific agency, and do so while following federal caps, state-specific rules that may be stricter, and priority rules when more than one garnishment applies to the same employee. Get it right and the process is routine. Get it wrong and the employer becomes liable for amounts that should have been withheld but weren't, and may face separate claims from the employee for improper handling. A defensible garnishment process is almost entirely about following the paperwork carefully, every time.
The Main Types of Wage Garnishment Child and spousal support orders. These are the most common type by volume and typically have the highest priority when multiple garnishments apply. Support orders usually run through the state's Income Withholding for Support process and can claim up to 50-65 percent of disposable earnings depending on whether the employee supports another family and whether payments are in arrears.
Federal tax levies. The IRS can levy wages under IRC 6331 by sending the employer Form 668-W, which directs the employer to withhold wages above a small exempt amount (based on the employee's filing status and dependents) until the tax debt is paid.
Student loan garnishments. The Department of Education can administratively garnish up to 15 percent of disposable pay for defaulted federal student loans, without a court order.
Court-ordered garnishments for consumer debt, including credit card judgments, medical debt, and personal loans. These are governed by state law and federal caps and typically run lower than support or tax garnishments.
State and local tax levies for unpaid state income tax or local taxes, operating similarly to federal levies with their own withholding rules.
The Federal Caps and State Rules Title III of the Consumer Credit Protection Act sets federal maximums on total wage garnishment: the lesser of 25 percent of disposable earnings, or the amount by which weekly earnings exceed 30 times the federal minimum wage. Disposable earnings means gross pay minus legally required deductions (federal, state, and local tax, Social Security and Medicare).
Support orders have their own caps: 50 percent of disposable earnings for employees supporting another family, 60 percent for employees not supporting another family, with an additional 5 percent when payments are in arrears. Tax levies follow a separate exemption formula. And more than 20 states set stricter caps than federal law (including North Carolina, South Carolina, Pennsylvania, and Texas, which are particularly restrictive or prohibit most consumer-debt garnishments entirely).
Which Garnishment Takes Priority When More Than One Applies? Support orders generally take first priority. Federal tax levies come next, followed by state and local tax levies, and finally consumer-debt garnishments. When multiple support orders are in place, they're paid pro rata within the applicable cap. Creditors of the same rank are typically paid in the order the garnishment orders were served on the employer.
How Employers Should Actually Process Garnishments Standard workflow. Log the garnishment order as soon as it arrives, with the creditor, the amount, the start date, and the expected duration. Verify the order is properly served (signed, notarized where required, and from a court or agency with jurisdiction over the employee). Notify the employee, usually in writing, with a copy of the order and an explanation of the expected deduction. Configure payroll to withhold the correct amount, respecting federal and state caps and priorities. Remit the withheld amount on the required schedule. Keep records for at least three years after the garnishment ends.
CCPA also prohibits employers from firing an employee because of a single garnishment. Discharge based on one garnishment is a federal violation with its own penalties, separate from the garnishment amount itself.
Running a Wage Garnishment Process That Protects Everyone Three practices cover most risk. Centralize garnishment processing so one team (usually payroll) owns the workflow rather than spreading it across departments. Configure payroll software correctly at setup and validate the math monthly, because quiet configuration errors compound over months before they surface. And train managers that an employee with a garnishment cannot be terminated for that reason, because the CCPA discharge rule protects the employee and the employer's knowledge of the garnishment can become evidence if the employee later files a claim.
Pair wage garnishment administration with payroll workflows, net pay calculations, and withholding processes. Reference the DOL Wage and Hour Division garnishment resources , the IRS levy resources , and the Office of Child Support Services employer resources for federal rules on support orders.
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