We’re here for you. See what we’re building for small businesses at gusto.com/covid-19. To download W-2s or 1099s, sign into your account.
We’re here for small businesses. For W-2s or 1099s, sign in.

×

How can we help?

Add or remove a garnishment or other post-tax deduction

If you need to deduct money from your employee's paycheck to account for a wage garnishment or other debt, you can add either a one-time deduction or an ongoing deduction that occurs every pay period. This money will stay in your company bank account, and if you've been ordered to remit it to any agencies, that will be your responsibility. Keep in mind:

  • Custom deductions are always post-tax. 
  • All deductions start with the next pay period.
  • If you're adding a child support garnishment to a state agency (except South Carolina), we'll pay the collecting agency on your behalf.
    • Please reference this article to help you set up a child support garnishment.

Add a post-tax garnishment or deduction while running payroll

You can add one-time custom deductions while running a regular payroll. To do so:

  1. Go to the Run payroll section of your account.
  2. Click Run Regular Payroll.
  3. During the first step of payroll, click on the “Actions” menu next to an employee's name to add or edit one-time deductions.
  4. Click Edit deductions.
  5. Click Edit or Add one-time deduction.
    • Edit: Update the deduction name, type, or amount, and click Save.
    • Add one-time deduction: Name the deduction, select the amount type, enter the amount to withhold, and click Add.
  6. Click Done once all deductions look accurate.

Add a post-tax garnishment or deduction in an employee's profile

  1. Click the People tab.
  2. Click your employee's name.
  3. Click +Add a Garnishment or Custom Deduction.
  4. Select if this is a garnishment or custom deduction (post-tax).
    • If you're adding a child support garnishment to a state agency (except South Carolina), we'll pay the collecting agency on your behalf. Please reference this article to help you set up a child support garnishment.
  5. For all other garnishments select the type from the dropdown menu. For custom deductions, enter a description which will appear on the employee's paystub.
    • If you have a child support order from South Carolina, or a US Territory or tribal support agency, select "Garnishment," and choose the garnishment type "Other Garnishment."
      • Add the description "Child Support."
    • We'll make these deductions from payroll and leave the money in your company account to pay directly to the collecting agency.
  6. Select if this a recurring or one-time post-tax deduction.
  7. Enter the post-tax deduction amount for each payroll:
    • Dollar amount per pay period
    • Percentage of disposable income, in which you can also add a maximum dollar amount per pay period
  8. For recurring post-tax deductions, add an annual maximum if applicable.
  9. Click Save & continue.

The next time you run payroll, this amount will be deducted from your employee's wages post-tax. The deduction will be seen as a separate line item on the employee's paystub.

If you've received a wage garnishment notice or income withholding order and have questions about it, contact the agency that sent you the notice or your accounting professional for more information.

Remove a post-tax garnishment or deduction

  1. Click the People tab.
  2. Click your employee's name.
  3. Scroll down to the Deductions headline.
  4. Find the garnishment or deduction you'd like to stop, and click edit.
  5. Determine if you'd like to temporarily or permanently stop the deduction:
    • Temporarily stop the deduction: Reduce the "Amount to Withhold" to $0.00 and then click Save and close.
    • Permanently stop the deduction: Click Delete this Deduction.

Need to set up pre-tax deductions instead?

Click here to set up pre-tax deductions.

COVID-19 update: Garnishments for federal student loan debt should be suspended from March 13, 2020 to September 30, 2020. 

If employee’s wages have already been garnished in error and you haven't made the payment to the collector yet, you can return those funds to your employee. If you've already made payments to the collector, the Department will refund your employee for any wages that were garnished in error. Learn how to temporarily or permanently stop a garnishment by reading below.

 

Payroll, benefits, HR and more.