Set up child support garnishments
You can deduct a post-tax amount from your employee's paycheck to account for a child support wage garnishment and Gusto will automatically remit payment to the necessary agency.
Note: Gusto will only remit payments for child support wage garnishments deducted on Regular Payroll runs.
If you received a child support garnishment from the state of South Carolina you will need to remit all employee deductions to the agency outside of Gusto. More information about this process can be found on the South Carolina Department of Social Services website.
Add a deduction for a garnishment
- Click the People tab.
- Click your employee's name.
- Click Add Garnishment or Other Deduction under the Deductions headline.
- Select Garnishment as the Deduction Type.
- Select Child Support as the Garnishment Type.
- Select the state agency listed on the order received in the Agency field.
- Select the county listed on the order received in the County field (if applicable).
- Florida, New York and Illinois are the only states that require this.
- Enter the CSE Case Number found on the order received.
- Contact the agency directly if the case number is not easy to locate.
- Enter the Total Amount to Withhold found on the order.
- Ensure the amount entered corresponds with the pay period selected in step 10.
- Select the 'Per' pay period that corresponds to the amount entered as the Total Amount to Withhold.
- If the pay period differs from the company's normal pay schedule, we'll use the information you entered from the withholding order and your employee's normal pay schedule to determine the per paycheck amount to be withheld.
- Click Save & Continue.
- The next time you run payroll this amount will be deducted from your employee's wages post-tax.
- The deduction will recur on all payrolls run thereafter until the garnishment has been removed from the employee's profile.
- The deduction will be seen as a separate line item on the employee's paystub.
Important: Federal rules indicate you may not withhold more than 50% of the disposable income if your employee is supporting another family, or 60% of the disposable income if your employee is not supporting another family. If your employee is behind in their child support payments (in "arrears") greater than 12 weeks, those limits can increase to 55% and 65%. Check the income withholding order to see if it indicates that your employee is in arrears greater than 12 weeks. State maximum withholding requirements can vary from federal guidelines so contact the state directly for more information.
Duplicate or multiple orders
If you receive duplicate orders for an employee there may be additional steps required before taking any action in your Gusto account. In general, employers that receive a duplicate withholding order must continue to honor the first order received in addition to notifying the proper agencies and individuals.
For additional detail and information about duplicate or multiple orders, visit the full-length article below:
Past-due payments (payments in arrears)
If a garnishment order states there is a 'payment in arrears' owed due to missed payments in the past, the agency will generally have already incorporated the past-due amount owed in their calculations of the 'Total Amount to Withhold' along with the employee's current child support liability.
If there are past due amounts owed outside of what is included in the ‘Total Amount to Withhold’ please reach out directly to the agency to determine the best method for making the past due payment on behalf of the employee.
Dismissing or terminating an employee with a garnishment
Legal Requirement: If you dismiss an employee with a garnishment order for any reason, you are required by law to notify the agency of the dismissal immediately. State guidelines vary but it is recommended you contact the agency 5 days after you learn that an employee will terminate employment or within 5 days after termination, whichever occurs earlier.
This form from the U.S. Department of Health & Human Services is accepted as fulfillment of the termination requirements for some states but not all. States may require additional information or specific employer action.
Reporting and viewing deductions
As an administrator you can view deductions in several ways:
- When running payroll
- In payroll reports
- In an employee's profile
- On an employee's paystubs
- In the 'agency payments' report
Employees can view their deductions also:
- On their paystubs
- In the Job & Pay tab of their employee profile under the Deductions headline
Gusto's deduction calculation
We'll use the information you entered from the withholding order and your employee's normal pay schedule to determine the per paycheck amount to be withheld.
For additional detail and information about how the amount was calculated and the federal rules that regulate withholding amounts, visit the full-length article below:
Agency payment timeline
Garnishment payments are sent to most state agencies 2 business days after the check date of the applicable payroll. Alabama child support agency payments are made 5 business days after the check date.
Reversing a payroll with a child support garnishment
Garnishment payments are sent to agencies 2 business days after the check date of the applicable payroll. Once payment has been remitted, we cannot recoup the funds on your behalf. Please directly contact the agency for questions about how to do so and next steps.
If an additional payroll is run to correct for the reversed one, garnishment deductions will occur again if deductions are enabled in the Advanced Settings.
In addition to the usual payroll debits (net pay, taxes, reimbursements), all child support garnishments will be summed together and will appear as a separate debit and bank transaction line item in the company's bank account.
Employers must adhere to several requirements once a child support order has been issued. These may include:
- Notification of an employee's dismissal
- New hire and rehire notification
- Income withholding
- Remitting payment(s) to the agency
Click here for the full list of requirements as outlined by the US Department of Health & Human Services.
Rehiring an employee with a child support garnishment order
When rehiring an employee all previous garnishments will be deactivated and will need to be re-entered in the employee's profile per the issued court order.
Notification of the rehire may be required by the state.
Injured employees with active garnishment orders
If an employee has been injured or is ill and unable to work, you should notify the court or agency that sent the withholding notice and provide the employee’s name and the name and address of any entity paying workers’ compensation or disability benefits.
If none of the benefits are being paid by the employer, the employer is usually not responsible for withholding.
If you have questions about about withholding responsibility, please reach out directly to the agency.