Calculate wage garnishment limits under federal law. Determines the lesser of 25% of disposable earnings or the amount above 30 times federal minimum wage.
Federal wage garnishment law under Title III of the Consumer Credit Protection Act (CCPA) limits the amount that can be withheld from an employee's paycheck for ordinary debts. The maximum garnishable amount is the lesser of 25% of disposable earnings or the amount by which disposable earnings exceed 30 times the federal minimum wage ($7.25/hour = $217.50/week). If disposable earnings are below 30 times minimum wage, no garnishment is permitted.
Disposable earnings are the portion of an employee's compensation remaining after all legally required deductions—federal, state, and local taxes, Social Security, Medicare, and state unemployment insurance. Voluntary deductions like 401(k), health insurance, and union dues are NOT subtracted when calculating disposable earnings for garnishment purposes.
This Garnishment Calculator helps payroll administrators and employees determine the maximum allowable garnishment per pay period. Enter the employee's gross pay, required tax withholdings, and pay frequency to see the disposable earnings and the garnishment cap. The calculator applies the dual-test formula required by federal law, ensuring compliance with Title III limits.
Miscalculating garnishments exposes employers to lawsuits from both creditors and employees. Withholding too much violates the employee's rights under the CCPA, while withholding too little can make the employer liable for the shortfall. This calculator applies the correct federal dual-test formula automatically, reducing compliance risk for every garnishment order processed.
Disposable Earnings = Gross Pay − Legally Required Deductions Test 1 = Disposable Earnings × 25% Test 2 = Disposable Earnings − (30 × $7.25 × Weeks in Period) Max Garnishment = max(0, min(Test 1, Test 2))
Result: $375 maximum garnishment (biweekly)
Disposable earnings = $2,000 − $500 = $1,500. Test 1: $1,500 × 25% = $375. Test 2: $1,500 − ($217.50 × 2 weeks) = $1,500 − $435 = $1,065. Garnishment = lesser of $375 or $1,065 = $375.
Federal garnishment law requires payroll to compute two amounts and withhold the lesser. Test 1 takes 25% of disposable earnings. Test 2 subtracts 30 times the federal minimum wage (prorated for the pay period) from disposable earnings. If Test 2 is negative, no garnishment is allowed because the employee's pay falls below the protected floor.
Several states impose stricter limits. For example, Texas generally prohibits wage garnishment for consumer debts (except child support, taxes, and student loans). Pennsylvania limits garnishment to specific debt types. New York applies a formula based on either 25% of disposable earnings or 30 times the state minimum wage, whichever is less. Always check your state's specific rules.
When an employee has multiple garnishments, child support orders take first priority, followed by federal tax levies, then bankruptcy orders, and finally ordinary creditor garnishments. The total cannot exceed applicable limits, so later-priority orders may receive reduced or no payment until earlier orders are satisfied.
Disposable earnings are gross pay minus all legally required deductions: federal income tax, state and local income taxes, Social Security tax, Medicare tax, and state unemployment insurance. Voluntary deductions like 401(k), health insurance, FSA, and union dues are NOT subtracted.
Federal law protects a base amount of earnings from garnishment. If disposable earnings are less than 30 times the federal minimum wage ($7.25 × 30 = $217.50 per week), the pay is entirely exempt from garnishment. The threshold scales by pay period length.
For ordinary creditor garnishments, the 25% cap is the federal maximum. However, child support orders can garnish up to 50-65%, and federal tax levies can take a higher percentage based on IRS tables. Student loan garnishments are capped at 15% of disposable earnings.
When state and federal garnishment limits differ, the employer must apply the limit that results in the smaller garnishment—the one most protective of the employee. Some states like Texas and Pennsylvania have much more restrictive garnishment rules.
Yes. All forms of compensation including bonuses, commissions, and severance pay are considered earnings subject to garnishment. The same disposable earnings tests apply.
Federal law prohibits termination for a single garnishment order. However, this protection does not extend to two or more garnishments. Some states provide broader protection against termination for multiple garnishments.
Process garnishments in the order received. The total amount withheld for all ordinary debt garnishments combined cannot exceed 25% of disposable earnings. If a child support order exists, it takes priority and reduces the amount available for other garnishments.
Title III specifies the federal minimum wage ($7.25/hour) for the 30-times test, regardless of your state's minimum wage. However, if your state's garnishment law references the state minimum wage, apply whichever rule is more protective for the employee.