Disposable Income Exclusions Subtask

Use this subtask to specify whether or not an employee’s federal, social security, Medicare, state withholding, or local taxes are exempt from the disposable income that is used to calculate the garnishment amount.

You can also specify which deductions and pay types, if any, are exempt from disposable income. You can enter only one Disposable Income Exclusions record for each Employee Garnishment record. If an employee has two garnishment records with the same Deduction Type, this subtask must be identical for both.

Disposable income is the portion of an employee’s income that is not necessary to support the debtor or the debtor's dependents. It is determined by reducing an employee’s income by taxes and, depending on the state and garnishment type, certain voluntary deduction amounts and types of pay.

Each state has different rules on how to determine disposable income for different types of garnishments.  Because of these differences, you can use this subtask to set up disposable income calculation rules for each employee garnishment record. The Compute Payroll screen uses this setup to determine an employee’s disposable income.

Contents

Field Description
Federal Income Tax

Select this check box if state or federal laws for the garnishment type mandate that federal income tax is exempt from disposable income.

Social Security Tax

Select this check box if state or federal laws for the garnishment type mandate that social security tax is exempt from disposable income.

Medicare Tax

Select this check box if state or federal laws for the garnishment type mandate that Medicare tax is exempt from disposable income.

State Withholding Tax

Select this check box if state or federal laws for the garnishment type mandate that state tax withholding is exempt from disposable income.

Local Withholding Tax

Select this check box if local or federal laws for the garnishment type mandate that local tax withholding is exempt from disposable income.

Subtasks

Subtask Description
Disposable Income Deduction Exclusions Click this link to open the Disposable Income Deduction Exclusions subtask. Use this subtask to specify the deduction codes that are exempt from the disposable income used to calculate the employee garnishment.
Disposable Income Pay Type Exclusions Click this link to open the Disposable Income Pay Type Exclusions subtask. Use this subtask to specify the pay types that are exempt from the disposable income used to calculate the employee garnishment.