While there are methods for some debtors to avoid wage garnishment orders through other types of loan deferment or cancellation, there are many who can find no other solution for their financial difficulties. For them, it is important to understand how wage garnishment calculations work and ensure that lenders and employers are respecting their rights.
Garnishment Regulations
The legal guidelines for wage garnishments are there for the protection of both the debtor and the lender. It is important to do whatever possible to allow for the rights and survival of both. In light of those needs, the basic guidelines for wage garnishments include:
- No more than 25% of the debtor’s disposable income for most debt garnishments upon the debtor’s wages (more for some types of child support and alimony garnishments, 15% for most student loan wage garnishments)
- No more than one garnishment for each levy within a 30-day period. Lenders who wish to levy additional garnishments must file a new order and pay the fees associated with it every time
- No employee can be fired for one wage garnishment, no matter how many levies are required to satisfy that one debt
Calculating Wage Garnishments
There is a specific and detailed formula for calculating wage garnishment amounts. Garnishments are based on a debtor’s disposable income. That amount is established by taking the amount left after their required deductions, such as federal and state taxes, state unemployment insurance taxes, Social Security, and required retirement deductions. It does not include voluntary deductions, such as health and life insurance, charitable donations, savings plans, and more.
The standard calculations for wage garnishments follow these guidelines:
- Garnishments are levied based on the debtor’s income. If their income is below the total of 30 times the federal minimum hourly wage per week, they cannot have their wages garnished.
- If their income is above 40 times the federal minimum hourly wage per week, their wages can be garnished at the regular rate, generally 25% (more for child support and alimony, 15% for student loans).
- If their income is more than 30 times the federal minimum hourly wage per week and less than 40 times the federal minimum hourly wage per week, the amount over 30 times the federal minimum hourly wage per week is garnished at the regular rate, generally 25% (more for child support and alimony, 15% for student loans).
This may be illustrated by an example. The current federal minimum hourly wage is $7.25 per hour.
- Those making below 30 times $7.25 per hour per week, or below $217.50 per week, cannot have their wages garnished.
- Those making 40 times $7.25 per hour per week, or $290 per week or more can face a garnishment of the regular amount, usually 25% (up to 50% for some types of alimony and child support, 15% for student loans).
- Those making more than $218.50 per week and less than $290 per week will have the amount above $218.50 garnished at the regular rate. (For example, those making $250 per week will have $31.50 garnished at the regular rate.)
Getting Legal Help with Calculating Wage Garnishment Amounts
Anyone who suspects they are not being garnished at the correct amount guaranteed by law may need the help of an experienced labor attorney to protect their rights. It may not require a full lawsuit to provide a solution. Just the expertise and negotiating ability of such a lawyer may be all that is necessary to motivate the lender or the employer to correct their mistakes.
