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Gusto's deduction calculation

Gusto will calculate the correct amount to be withheld on each paystub based on the employee's normal pay schedule.

Example 

You receive a garnishment court order and you enter that an employee owes $125 per biweekly pay period (26 pay dates per year) into Gusto.

  • The company and all employees are set up on a semimonthly pay schedule (24 pay dates per year).

First, Gusto will annualize the court ordered amount:

  • $125 x 26 (pay dates on bi-weekly schedule) = $3,250 total per year

Then, Gusto will divide the total owed annually by the amount of pay periods in the company’s normal pay schedule. Semi-monthly pay periods have 24 pay dates per year:

  • $3,250 / 24 = $135.42 per pay date.

The employee will see $135.42 deducted out of each paycheck post-tax.

Pay dates per company pay schedule - used for calculations.

  • Weekly pay period - 52 pay dates
  • Bi-weekly pay period - 26 pay dates
  • Semi-monthly pay period - 24 pay dates
  • Monthly pay period - 12 pay dates 

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