This chapter discusses how to:
Set up a garnishment deduction.
Define disposable earnings for garnishments.
Set up garnishment rules.
(USA) Maintain garnishment proration rules.
See Also
This section discusses how to:
Set up the Deduction table for garnishment deductions.
Set up the General Deduction table for garnishment deductions.
To define deduction information for garnishments:
Specify a garnishment deduction priority on the Deduction Table - Setup page.
Enter a number that is large enough to enable the system to deduct taxes and required deductions before it attempts to deduct garnishments in the Deduction Priority field.
Select Garnishment in the Special Processing field.
This deduction code becomes the default garnishment deduction code.
Arrears do not apply to garnishment deductions. Instead, establish a proration rule.
Note. (CAN) For Canada, there is no default garnishment deduction code because you can define multiple before-tax and after-tax deduction codes to process garnishments. In addition, proration rules don’t apply for Canada.
Assign a garnishment deduction classification on the Deduction Table - Tax Class page.
For the U.S., select After-Tax as the deduction classification. For Canada, select Before-Tax or After-Tax.
For example, a Canadian child support garnishment might be a before-tax garnishment.
Select None as the Canadian sales tax.
Specify how the garnishment affects taxable grosses on the Deduction Table - Tax Effect page.
For U.S. companies, garnishments have no effect on taxable grosses.
For Canadian companies: after-tax garnishments have no effect on taxable grosses; before-tax garnishments do affect taxable grosses.
Specify how the system deducts the garnishment from pay on the Deduction Table - Process page.
Select the Partial Deduction Allowed check box for U.S. only.
Don’t select for Canada or U.S. federal government. Partial deductions apply only to jurisdictions that permit prorated payments.
Select the Deductions Taken From Sep Chk (deductions taken from separate check) check box for U.S., Canada, and U.S. federal government.
Don’t select the Deduction Arrears Allowed or Stop Deduction at Termination check boxes.
(For Canadian processing, this would be the recommended setup).
The Maximum Yearly Deduction field should be left blank.
Define the garnishment limit on the Garnishment Specification Data page when setting up an employee's garnishment.
Note. Don’t specify garnishment withholding frequencies on the Schedule page in the Deduction Table component (DEDUCTION_TABLE). Define the withholding frequency for garnishment deductions at the employee level on the Garnishment Specification Data page.
See Also
(USA) Maintaining Garnishment Proration Rules
To establish a garnishment deduction, select Flat Amount as the deduction calculation routine on the General Deduction Table page. The system automatically calculates the amount based on the employee’s Garnishment Specification records, and deducts the appropriate amount, depending on the garnishment rules.
See Also
To define disposable earnings for garnishments, use the Disposable Earnings Defn (GARNISH_DE_DEFN) and Disposable Earnings Defn CAN (GARNISH_DE_DEFN_CN) components.
This section provides an overview of disposable earnings for garnishments and discusses how to:
(USA) Review and update U.S. disposable earnings definitions.
(CAN) Review and update Canadian disposable earnings definitions.
Disposable earnings are the earnings subject to garnishment. What constitutes disposable earnings varies according to the governing jurisdiction (that is, federal, state, provincial, or local authority). For example, a disposable earnings definition might specify the calculation of an employee’s gross earnings minus all federal and state taxes and health insurance premiums.
Note. Use the calculation formula to define which taxes subtract from the disposable earnings.
See Setting Up Garnishment Rules.
PeopleSoft maintains and delivers the standard federal and state disposable earnings definitions with Payroll for North America.
Important! The PeopleSoft-maintained garnishment disposable earnings definitions are complete as delivered except for deductions to include or exclude when determining the disposable earnings subject to garnishment. During the implementation process, enter the deductions pertaining to specific disposable earnings definitions.
Note. Courts and other authorized jurisdictions frequently issue garnishment orders defining disposable earnings definitions that are different from standard definitions. In such a case, use the Disposable Earnings Definition page to establish a record of the court’s individual definition. You are responsible for maintaining these records.
For U.S. federal tax levies, the Internal Revenue Service defines disposable earnings as gross earnings minus voluntary and involuntary deductions in existence when the employer receives the garnishment order. Therefore, you can apply only involuntary increases in those existing deductions to the disposable earnings calculation for garnishments of this type.
PeopleSoft provides FEDTAXLEVY as the DE definition ID for federal tax levies and for state tax levies for which the same rules apply.
Note. For the DE definition ID FEDTAXLEVY, use the Deductions Reducing DE (deductions reducing disposable earnings) group box to identify only those deductions that you cannot apply to the disposable earnings calculation.
(CAN) Canadian Federal Disposable Earnings Definitions
PeopleSoft provides and maintains two Canadian federal disposable earnings definitions:
FEDERALCAN: Includes taxable benefits and subtracts statutory deductions (that is, income tax, Canada and/or Quebec Pension Plan [CPP/QPP], and Employment Insurance [EI]).
FEDCANEXBN: Excludes taxable benefits and subtracts statutory deductions (that is, income tax, CPP/QPP, and EI) .
Access the Disposable Earnings Definition page.
DE Definition ID (disposable earnings definition ID) |
This ID links the garnishment disposable earnings definition to the applicable Garnishment Rules table. |
(CAN) Adjustment to Gross
The fields in this group box appear on the page only for Canadian users. They are for information only.
Deductions Reducing DE
Some court orders require that you subtract deductions from the employee’s gross pay to arrive at disposable earnings. Use this group box to enter deductions to use when calculating disposable earnings.
Note. During the implementation process, enter the deductions to reduce the disposable earnings subject to garnishment.
Load Deductions |
Click to access the Load Deductions to Reduce DE page, where you can load deductions into the Deductions Details grid by plan type, or by plan type and benefit plan. Note. You cannot use this option to load general deductions. You must enter general deductions into the Deduction Details grid manually. |
Deductions Details |
You can manually enter deductions using the editable fields in this grid. General deductions must be manually entered. If you load deductions using the Load Deductions option, the system replaces the existing deductions having the same selection criteria. After loading deductions using the Load Deductions button, you can delete any of the loaded deductions that are not appropriate. You can also add additonal deductions manually or by using the Load Deductions option again. Note. After loading and editing the deductions, you must save the page. |
Access the Load Deductions to Reduce DE page.
To load deductions:
Select a plan type or combination of plan type and benefit plan.
The system selects all deductions in the plan type or benefit plan that:
Are active as of the effective date of the DE definition.
Have deduction classification After Tax or Before Tax.
Click OK to load deductions that meet the criteria into the Garnishments DE Deduction table (GARN_DE_DED) and into the grid on the Disposable Earnings Definition page, where you can further edit the list.
Click the Load Deductions option on the Disposable Earnings Definition page to return to this page to select and load deductions from additional plan types or benefit plans.
To set up garnishment rules, use the Garnishment Rules Table (GARNISH_RULE_TBL) and Garnishment Rules Table CAN (GARN_RULE_TBL_CN) components.
This section provides overviews of garnishment formulas and reuse of formulas for the U.S. and discusses how to:
Identify garnishment rules.
Specify adjustments to disposable earnings.
(USA) Enter exemption amounts.
(CAN) Enter exemption amounts.
Define calculation formulas.
Clone an existing garnishment rule.
Note. Payroll for North America provides garnishment rules for the majority of federal, state, provincial, and local garnishment requirements.
Define calculation formulas on the Garnishment Rules Table - Calculation Formula page.
This section discusses:
(CAN) Sample calculation formula.
(USA) Sample calculation formula.
(CAN) Sample Calculation Formula
This example illustrates how to define the formula for a Canadian garnishment rule (BC garnishment law source and GEN/DEP rule ID):
Step |
Calculation Type |
Formula |
Step 1 |
DE for Rule (disposable earnings) |
earnings subject to garnishment − statutory deductions = result of step 1 |
Step 2 |
DE for Rule (disposable earnings) |
result of step one − selected deductions = result of step 2 This is the total disposable earnings. |
Step 3 |
Exemption |
result of step two × exempt percent = result of step 3 Note. The system performs the minimum and maximum check if appropriate to arrive at the total exemption amount. |
Step 4 |
Amount available for garnishment |
result of step two − result of step three = amount available for garnishment. |
(USA) Sample Calculation Formula
This example illustrates how to define the formula for a simple U.S. garnishment rule:
Step |
Calculation Type |
Formula |
Step 1 |
DE for Rule (disposable earnings) |
earnings subject to garnishment − federal taxes = result of step 1 |
Step 2 |
DE for Rule (disposable earnings) |
result of step one − state taxes = result of step 2 |
Step 3 |
DE for Rule (disposable earnings) |
result of step two − local taxes = result of step 3 |
Step 4 |
DE for Rule (disposable earnings) |
result of step 3 − selected employee deductions = result of step 4 This is the total disposable earnings amount. |
Step 5 |
Exemption |
result of step 4 × exempt percent 1 = result of step 5 |
Step 6 |
Amount available for garnishment |
result of step 4 – result of step 5 = amount available for garnishment |
On the Calculation Formula page, you can define a U.S. garnishment rule for a law source and rule ID by using (referencing) the same calculation formula as another law source and rule ID already defined in the system. This option is particularly useful if both rules use the same types of exemption variables but those variables do not have the same values.
To reference the calculation formula of another rule, select the Use Calculation Formula From Another Garnishment Rule option and enter the law source, rule ID, and effective date of the rule that you want to reference. The referenced rule must have a self-contained calculation formula that does not reference another rule. The system stores the identification of the referenced rule rather than the formula steps.
Note. You must ensure that the exemption variables that you define for the garnishment rule are also used in the rule that you reference. If you define any variables for the rule that are not also in the referenced rule, the system ignores the unused variables during calculation. The values of the exemption variables can differ in the two rules.
Changing a Referenced Rule
When you change a rule that is referenced by other rules, you must determine the impact on the rules that reference it.
For example, if you change rule 1 with a new effective date, you must decide whether those changes also apply to rule 2, which references rule 1.
If the changes in rule 1 do not apply to rule 2, then you can continue to reference the earlier effective dated row of rule 1 for the calculation of rule 2.
If (now or at some later time) the changes in rule 1 do apply to rule 2, then you must create a new effective-dated row for rule 2 and reference the new effective date of rule 1 on the Calculation Formulas page.
Note. The new effective date of rule 2 does not have to match the new effective date of rule 1. The system uses the effective date of rule 1 that appears on the Calculation Formula page for the rule 2 effective date being processed.
The third section of the Garnishment Rule Table U.S. SQR report (PAY715) lists each rule that is referenced in other rules along with all the rules that reference it. This section lists the state, rule ID, description, and effective date for each referenced and referencing rule.
The first two sections of the report list the following for each rule by state:
Section 1: Rule details and exemption variables.
Section 2: Formula details.
Page Name |
Object Name |
Navigation |
Usage |
GARNISH_RULE_TBL1 |
|
View or enter identifying and descriptive information for a garnishment rule. |
|
GARNISH_RULE_TBL2 |
|
Override the Subject to Garnishment specification on the Earnings table for selected earnings codes. |
|
GARNISH_RULE_TBL3 |
Set Up HRMS, Product Related, Payroll for North America, Garnishments, Rules Table, Exemption Variables |
(USA) View or enter amounts for exemption variables to be used in the calculation formula for the rule. |
|
GARN_RULE_TBL3_CN |
Set Up HRMS, Product Related, Payroll for North America, Garnishments, Rules Table CAN, Exemption Variables |
(CAN) View or enter amounts for exemption variables to be used in the calculation formula for the rule. |
|
GARNISH_RULE_TBL4 |
|
Create step-by-step formulas for calculating garnishments or the amount available for garnishment. |
|
Clone Garnishment Rules |
RUNCTL_GARNCLONE |
Set Up HRMS, Product Related, Payroll for North America, Garnishments, Clone Rules |
Clone an existing garnishment rule using the Rules Clone Utility Application Engine process (GARN_CLONE). Copy all data from an existing garnishment rule to create another rule identified with a different combination of law source, and rule ID. Rules created in this way are customer-maintained rules. |
PRCSRUNCNTL |
|
(USA) Generate the Garnishment Rules (U.S.) report (PAY715), which lists the contents of the Garnishment Rule table by state. (CAN) Generate the Garnishment Rules (CAN) report (PAY715CN), which lists the contents of the Garnishment Rule table by province and territory. |
Access the Garnishment Rules Table-Description page.
Garnish Law Source |
The particular jurisdictional entity for the garnishment. |
Rule ID |
The unique rule ID that identifies a garnishment rule. The rule ID along with the garnish law source links the garnishment rule specifications to the garnishment specification data for an individual employee. Note. (CAN) You can use any rule if it applies to a garnishment situation, regardless of the original province designation. The ZZ value identifies federally related orders. |
Maintenance Responsibility |
In addition to the PeopleSoft-maintained garnishment rules, you can set up your own garnishment rules to handle any exceptions to the delivered rules. Customer: This value indicates that it is your responsibility to maintain rules that you have revised, cloned, or defined. |
Access the Earnings Inclusions/Exclusions page.
Earnings Code Inclusions/Exclusions
Earnings Code |
Select an earnings code to override its Subject to Garnishment specification on the Earnings Table - Taxes page. |
Include/Exclude Indicator |
Select Include or Exclude to reverse the effect of the Subject to Garnishment setting on the Earnings Table - Taxes page for this earnings code and garnishment rule. |
Access the Exemption Variables page.
Exemption Variables
View or enter values for the variables that you need in the calculation formula for this rule.
Dependents Excluded |
Specify the number of dependents to exclude before applying the exempt amount per dependent. For example, for an exemption of 30 USD per dependent when an employee has more than two dependents, enter 2 in this field, and enter 30 in the Exempt Amount Per Dependent field. |
Minimum Exemption and Maximum Exemption |
If you enter values for these options and specify the Min/Max Check condition for a step in the calculation formula, the system compares the calculation results for the step to the minimum and maximum exemption amounts that you enter here. If the amount is less then the minimum, the system uses the minimum. If the amount is greater than the maximum, the system uses the maximum. |
Amount Frequency
Select the frequency that applies to the exemption variable amounts for this garnishment rule. The default frequency is Monthly.
Note. If your selections on this page do not match the pay group pay frequency, the system automatically performs a conversion.
Access the Exemption Variables page.
Exemption Variables
View or enter values for the variables that you need in the calculation formula for this rule.
Dependents Excluded |
Specify the number of dependents to exclude before applying the exempt amount per dependent. For example, for an exemption of 30 CAD per dependent when an employee has more than two dependents, enter 2 in this field, and enter 30 in the Exempt Amount Per Dependent field. |
Minimum Exemption and Maximum Exemption |
If you enter values for these options and specify the Min/Max Check condition for a step in the calculation formula, the system compares the calculation results for the step to the minimum and maximum exemption amounts that you enter here. If the amount is less then the minimum, the system uses the minimum. If the amount is greater than the maximum, the system uses the maximum. |
Amount Frequency
Select the frequency that applies to the exemption variable amounts for this garnishment rule. The default frequency is Monthly.
Note. If your selections on this page do not match the pay group pay frequency, the system automatically performs a conversion.
Access the Calculation Formula page.
DE Definition ID (disposable earnings definition ID) |
Select the disposable earnings definition that you want to use with this garnishment rule. It is important to select the correct DE definition ID. Note. For Canadian garnishment processing, there are only two supported IDs (FEDERALCAN and FEDCANEXBN). |
(USA) Referencing a Calculation Formula From Another Garnishment Rule
Use Calculation Formula From Another Garnishment Rule |
To reference the calculation formula of another rule, select this option and enter the law source, rule ID, and effective date of the rule that you want to reference. The referenced rule must have a self-contained calculation formula that does not reference another rule. The system stores the identification of the referenced rule rather than the formula steps. |
Law Source, Rule ID, and Effective Date |
These options become visible on the page if you select Use Calculation Formula From Another Garnishment Rule. Identify the rule whose calculation formula you want to reference in this rule. |
See (USA) Understanding Calculation Formula Referencing.
Note. These fields are not visible on the page for Canada.
Calculation Formula
Use this group box to create a step-by-step formula for calculating the garnishment or the amount available for garnishment.
Note. (USA) If you select Use Calculation Formula From Another Garnishment Rule, the fields in this group box are unavailable for data entry.
Step |
The step or sequence number in the calculation formula. |
Calculation Type |
Select the option that identifies what the formula step is calculating. Options are: DE for Rule (disposable earnings for rule), Exemption, or Amt Available for Garnishment (amount available for garnishment). |
Condition |
If necessary, specify how to handle the end result of a step. Options are: If negative, set to zero, Greater of Elements 1 and 2, Lesser of Elements 1 and 2, Min/Max Check (minimum and maximum check), and None. |
See Also
Understanding Garnishment Formulas
Access the Clone Garnishment Rules page.
Current Garnishment Rule
Select the law source, rule ID, and effective date of the rule that you want to copy.
New Garnishment Rule(s)
For each new rule that you want to create based on the current rule, enter the law source, rule ID, and effective date.
You can clone one law source and rule ID combination into multiple combinations of law source and rule ID by adding rows and entering the identifiers.
Note. You must enter an effective date for each new rule that you create. You can enter the same effective date for multiple rules as long as the law source and rule ID combination is unique.
To set up garnishment proration rules, use the Proration Rules Definition (GARN_PRORATE_DF) and State Proration Rules (GARN_PRORATE_RL) components
This section provides an overview of garnishment proration rules and discusses how to:
View garnishment proration rules.
View garnishment proration rules by state.
Note. (CAN) In Canada proration rules do not apply; courts and authorized agencies issue garnishment orders and determine proration requirements.
Because garnishments cannot go into arrears, some states require that employers prorate an employee’s garnishments when there is insufficient monies available to cover all garnishments of the same type (for example, if an employee has two child support garnishments and not enough money to cover both of them).
In processing, the system uses the proration rule of the state from the Garnish Law Source field on the Garnishment Spec Data 6 page.
See Also
(USA) Applying Garnishment Rules
Access the Proration Rules Definition page.
PeopleSoft maintains the Garnishment Proration Definition table with a proration rule ID and text for each rule used by states that permit proration of garnishments. If you make any changes or additions to this table, you become responsible for maintaining these records.
See Also
Entering Colorado Child and Spousal Support Orders
Overriding Garnishment Proration and Specifying Pay Mode
Access the State Proration Rules page.
Effective Date |
The system displays multiple rules for the same combination of proration rule state and type of garnishment in descending order of effective date. |
Proration Rule ID |
Identifies the proration rule from the Garnishment Proration Definition table. |
Definition |
Displays the text of the rule the payroll system follows when applying the proration rule. PeopleSoft maintains this information in the Garnishment Proration Definition table. |