|
TEXT
VERSION
How to Withhold for Ordinary Debts
A. First Step
Calculate the protected amount; the employee's check cannot be reduced below this amount. Note: As of July 24, 2008, the Federal Minimum Wage Rate will be $6.55/hour.
- Weekly Pay Period. Multiply the Federal Minimum Wage Rate ("F.M.W.R.") times 40. Example: If F.M.W.R. is $6.55/hour; $6.55 times 40 = $262.00; this is the protected amount.
- Biweekly Pay Period. Multiply F.M.W.R. times 40 times 2. Example: $6.55 times 40 times 2 = $524.00 ; this is the protected amount.
- Semimonthly Pay Period. Multiply F.M.W.R. times 40 times 2.16665. Example: $6.55 times 40 times 2.166665 = $567.67; this is the protected amount.
- Monthly Pay Period. Multiply F.M.W.R. times 40 times 4.33330. Example: $6.55 times 40 times 4.33330 = $1,135.32; this is the protected amount.
- Pay Period Greater than One Month.
- Calculate number of weeks by dividing days in work period by 7, to four decimal places.
- Multiply the F.M.W.R. times 40 times the number of weeks. Example: assuming a F.M.W.R. of $6.55 and a work period of 46 days: 46 / 7 = 6.5714 weeks; $6.55 times 40 times 6.5714 weeks = $1,721.71; this is the protected amount.
B. Second Step
Calculate the Maximum Amount Which May Be Garnished; multiply disposable earnings by 25%. Example: assuming weekly disposable earnings of $544.00: $544.00 times 25% = $136.00; no more than this amount can be garnished from the paycheck.
C. Third Step
Calculate the Amount To Be Withheld; subtract the protected amount from disposable earnings, but do not exceed 25% of disposable earnings.
Example 1: Assuming disposable earnings of $600.00 and a biweekly pay period: $600.00 – 468.00 (protected amount, see biweekly pay period example, paragraph A above) = $132.00. Since this does not exceed the 25% maximum ($600.00 times 25% = $150.00), withhold $132.00.
Example 2: Assuming disposable earnings of $2,100.00 and a monthly pay period: $2,100.00 - $1,544.71 (protected amount, see monthly pay period protected amount example, paragraph A above) = $555.29 . Since this exceeds the 25% maximum ( $2,100.00 times 25% = $525.00 ), only the 25% maximum of $525.00 may be withheld.
<< return to previous page
|
