Involuntary Deduction Wage Basis Rules for the US

State and federal wage basis rules exist for all predefined primary and secondary classifications.

This topic covers:

How wage basis rules work with involuntary deductions
How to view the predefined wage basis rules
How to configure wage basis rules for user-defined classifications
How to configure wage basis rules for tips

How Wage Basis Rules Work with Involuntary Deductions

Wage basis rules define how:

Earnings contribute to the disposable income for the different involuntary deduction types.

For example, an earning type might contribute to disposable income for Child Support deductions in Alabama but are excluded in California.
Deductions reduce the disposable income for the different involuntary deduction types.

For example, a deduction type might reduce the disposable income for Tax Levy deductions but not for Child Support.

Note: Configuring these wage basis rules to exclude element classifications isn't a suitable alternative for configuring time-of-writ deductions for tax levies. The payroll process doesn't refer to the wage basis rules when it determines what liabilities the employee had at the time a levy was served.For further info, see Deductions at Time-of-Writ in the Help Center.

You can view, define, and edit these rules through the Component Group Rules task.

How You Can View the Predefined Wage Basis Rules

To view the wage basis rules that have been predefined at the state and federal level:

Start the Component Group Rules task.
Query for and select the Involuntary Deductions component group.
In the tree structure, expand Involuntary Deductions.

Enlarge Calculation Component Group Overview to view the tree.
Expand Wage Basis Rules.

Select the appropriate node.

State to view state-specific rules
No References to view federal rules

A table of all wage basis rules displays, organized by the appropriate state and deduction type.

To view the rules by deduction type, expand the tree under Related Deductions and select the appropriate type.

Green check marks under Deductions have different meanings for earnings and deductions.

A check mark here	Means this
Supplemental earnings	Identifies the classifications that contribute to the disposable income for that deduction type. For example, the Bonus supplemental earning for Alabama is marked as contributing to disposable income for Child Support, Garnishment, and Alimony calculations.
Deductions	Identifies the classifications subject to disposable income. These classifications don't reduce the disposable income for calculations of the indicated involuntary deductions. For example, the Health Care 125 pretax deduction for Alabama is marked as subject to disposable income for Child Support, Garnishment, and Alimony calculations. For the classifications that aren't subject to disposable income, no wage basis rule exists. These classifications reduce the disposable income for calculations of the involuntary deduction. For example, the Health Care 125 pretax deduction for Colorado isn't subject to disposable income for Child Support or Garnishment calculations.
Employee Requested	This payroll component has predefined wage basis rules. By default, all earnings and deductions are subject to disposable income for this component. You can modify them to suit your needs.

A check mark here

Means this

Supplemental earnings

Identifies the classifications that contribute to the disposable income for that deduction type.

For example, the Bonus supplemental earning for Alabama is marked as contributing to disposable income for Child Support, Garnishment, and Alimony calculations.

Deductions

Identifies the classifications subject to disposable income. These classifications don't reduce the disposable income for calculations of the indicated involuntary deductions.

For example, the Health Care 125 pretax deduction for Alabama is marked as subject to disposable income for Child Support, Garnishment, and Alimony calculations.

For the classifications that aren't subject to disposable income, no wage basis rule exists. These classifications reduce the disposable income for calculations of the involuntary deduction.

For example, the Health Care 125 pretax deduction for Colorado isn't subject to disposable income for Child Support or Garnishment calculations.

Employee Requested

This payroll component has predefined wage basis rules. By default, all earnings and deductions are subject to disposable income for this component. You can modify them to suit your needs.

How You Configure Wage Basis Rules for User-Defined Classifications

If you're using user-defined Pretax Deduction secondary classifications, you must make sure the payroll process honors the appropriate involuntary deduction wage basis rules for them. To do that, feed the Other Pretax balance for any elements that use your user-defined classifications.

How You Configure Wage Basis Rules for Tips

Credit card tips aren't subject to disposable income. If your employees earn credit card tips:

Define your credit card tip elements using the Tips Supplemental secondary classification.
Define the appropriate wage basis rules to exclude those earnings from disposable income for the applicable states.

Alternatively, you can create a user-defined Supplemental Earning secondary classification and define the wage basis rules as appropriate.

Note: If you have surcharge and service charge tips, use the Tips Regular secondary classification, as these earnings are subject to disposable income. You don't need to configure the wage basis rules.