What is the percentage that can be taken from your pay?

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What is the percentage that can be taken from your pay?

How is it determined?

Asked on September 21, 2011 under Bankruptcy Law, Tennessee

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Are you referring to wage garnishment by a creditor? If you are, the maximum is 25% of your disposable income under federal law. However, disposabel in this context has a very specific meaning: it is your income after taking out only FICA and other deductions mandated by law (i.e. you don't consider leaving expenses, housing, etc., the way you would normally when figuring out your disposable income). Therefore, it's effectively 25% of around 95% (give or take) of  your income.

There are couple of wrinkles:

You can't have any garnishment unless you earn, on a weekly basis, at least 30 times the federal minimum wage; i.e. unless earn around $220 or more per week, no garnishment.

If you only earn a bit over the threshold above, you'll have less garnished: the rule is 25% of disposable income or your weekly income over 30 times the federal minimum wage, whichever is less.

Child support, spousal support, and tax debts allow for a higher level of garnishment--at least up to 50%, I believe, possible more.


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