Payroll Garnishments and Admin fees paid by creditor

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Posted on by J Morris

Need a little help with this one. I am setting up a payroll garnishment for a student loan and also setting up the Payroll to Payables integration. The deduction is based on 15% of earnings and the employee is an hourly employee. The client is taking a $3 administrative fee for each pay run. the total amount is around $10,000

So for example, if the system calculates a Garnishment of 100, $100 is withheld from the check and a $97 check needs to be cut to the creditor - with $3 retained as income. The trick is the garnishment amount changes each period because the employee is hourly and we need to track the total amount of the debt less what has been paid.

Anyone ever run into this or know of a good way to handle this scenario using garnishments.

Thanks!

Joe

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Community Member Microsoft Employee on at

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RE: Payroll Garnishments and Admin fees paid by creditor

Set up 2 deductions - one for the garnishment amount and one for the fee. That way, you'll know exactly what amount is applied to the $10,000 balance
Sherlene Sorenson 965 on at

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RE: Payroll Garnishments and Admin fees paid by creditor

Hi Joe,

You would need a separate deduction codes for the fee. It works best if you set up GARN1 and FEE1, GARN2 and FEE2. Greenshades garnishment product handles this well, if you need the codes to be tied together so that fees aren't deducted if the garnishment isn't deducted.