Wage Garnishment: What Can and Cannot Be Taken

The formula, and the part people miss

For an ordinary consumer debt — a credit card, a medical bill, a personal loan reduced to judgment — federal law caps what can be taken at whichever is less: 25 percent of your disposable earnings for the week, or the amount by which those earnings exceed thirty times the federal minimum wage. Both limbs have to be calculated and the smaller one is the ceiling. Applying only the percentage is the single most common way this goes wrong.

Thirty times $7.25 is $217.50, and that second limb is the one nobody knows about. It creates an absolute floor rather than a proportion: if your weekly disposable earnings are $217.50 or less, nothing can be garnished for an ordinary debt at all, regardless of the percentage. Between $217.50 and roughly $290 a week, only the amount above $217.50 can be taken, which is less than 25 percent.

Disposable earnings means what is left after legally required deductions — tax, Social Security, Medicare — and not after your rent, your car payment or your voluntary retirement contribution. That distinction matters because people calculate the wrong base and conclude a garnishment is lawful when it is not. Using take-home pay after voluntary deductions produces a smaller base and a smaller apparent entitlement, which understates what is protected.

A worked example

Suppose disposable earnings are $600 for the week. Twenty-five percent of that is $150, and the amount above $217.50 is $382.50. The lesser of the two figures is $150, so $150 is the ceiling for that week.

Now suppose disposable earnings are $260 instead. Twenty-five percent of that is $65, while the amount above $217.50 is only $42.50. The lesser figure is $42.50, so that is the maximum that can be taken — and it is well under a quarter, which is the whole point of the second limb.

Run your own figures before assuming a garnishment amount is correct. Errors here are common, because payroll systems apply the 25 percent rule and not always the floor. The floor is the newer-looking limb and the one most often omitted from a configuration.

The higher-limit categories

Not every debt runs on that formula, and the exceptions permit substantially more to be taken. Knowing which category a garnishment falls into is the first thing to establish. Child support and alimony can reach 50 percent of disposable earnings where you are supporting another spouse or child, and 60 percent where you are not, with an additional 5 percent permitted if payments are more than twelve weeks in arrears.

Federal tax debt runs on its own basis entirely — rather than a percentage, the IRS leaves you an exempt amount determined by your filing status and dependents, and takes the rest. That can leave considerably less than the consumer formula would. Federal student loans in default can be administratively garnished at up to 15 percent of disposable pay without a court judgment, which is unusual and worth knowing.

The ordinary consumer cap does not apply to any of these, so a support order and a credit card judgment are not comparable situations even though both arrive looking like the same piece of paper. Read the order to see what kind of debt it concerns before checking any arithmetic, because the wrong formula produces a confident wrong answer that looks entirely reasonable on a stub.

States frequently protect more

The federal formula is a ceiling, not a target, and a substantial number of states protect a larger share of wages. Some raise the floor by tying it to a state minimum wage well above $7.25, which mechanically lifts the protected amount. Some cap ordinary garnishment below 25 percent. A few prohibit wage garnishment for most consumer debts almost entirely.

Where federal and state rules differ, the one more favorable to you governs, which is the same principle running through the rest of wage law and worth applying here automatically. So the federal formula tells you the worst case rather than the answer, and your state’s rule is what actually applies to your paycheck. Check it before concluding an amount was lawful.

You cannot be fired for one

Federal law prohibits discharging an employee because their earnings have been garnished for any one indebtedness, however many separate levies or proceedings arise from that single debt. That protection is narrower than it first appears — it covers one debt, and the federal statute does not extend the same protection to a second and third. That gap is real and it is one of the reasons the state position matters.

Several states go further and prohibit discharge regardless of the number of garnishments, which is another reason to check the state position. Where the federal protection applies and is breached, the remedy can include reinstatement as well as back pay, which is a stronger outcome than most wage remedies offer and reflects how seriously the protection is treated.

It is worth knowing this before a conversation with an employer, because the fear of being fired is what stops most people from questioning a garnishment amount that is wrong. Knowing the protection exists is often the whole difference between asking and staying quiet, and staying quiet is how an incorrect amount runs unchallenged for a year or more.

If a garnishment appears on your stub

Establish what the underlying debt is and whether there is a court order behind it, because most ordinary consumer garnishment requires a judgment. If you never received notice of the proceeding, that is a serious issue in itself and may be grounds to challenge the judgment itself rather than the garnishment. Those are different proceedings with different deadlines.

Then check the arithmetic against the formula, using disposable earnings rather than gross and applying whichever of the two limbs is smaller. Then check whether your state protects more than the federal formula, since it frequently does and the difference can be substantial.

If the debt itself is disputed, the garnishment is not the place to resolve it — that runs through the court that issued the order. But an incorrect calculation is between you and your employer’s payroll, and it gets corrected once somebody is shown the figures. Payroll will usually rerun a calculation without argument when the two limbs are set out.

What is protected entirely

Certain federal benefits are generally exempt from garnishment for ordinary debts, including Social Security, veterans’ benefits and several others. Where those funds are deposited into a bank account, protections also apply at the account level for a defined lookback period. A bank receiving a levy is supposed to review recent deposits before freezing anything.

Keeping exempt funds in a separate account from other money makes those protections considerably easier to assert, because commingled funds are harder to trace. That is a practical step worth taking before any problem arises rather than after one has. Separating the accounts costs nothing and preserves an argument you may never need.

This is general information about how the limits work rather than legal or financial advice. Garnishment interacts with debt law, state exemptions and sometimes bankruptcy, so a legal aid organization or an attorney is the place to take a specific situation — many offer a free initial consultation, and state labor agencies will answer questions about the withholding calculation itself.