Can your bonus be garnished

For employees who receive tips, the cash wages paid directly by the employer and the amount of any tip credit claimed by the employer under federal or state law are earnings for the purposes of the wage garnishment law.

Tips received in excess of the tip credit amount or in excess of the wages paid directly by the employer if no tip credit is claimed or allowed are not earnings for purposes of the CCPA. It also includes withholdings for employee retirement systems required by law. Deductions not required by law — such as those for voluntary wage assignments, union dues, health and life insurance, contributions to charitable causes, purchases of savings bonds, retirement plan contributions except those required by law and payments to employers for payroll advances or purchases of merchandise — usually may not be subtracted from gross earnings when calculating disposable earnings under the CCPA.

Title III sets the maximum amount that may be garnished in any workweek or pay period, regardless of the number of garnishment orders received by the employer.

For ordinary garnishments i. When pay periods cover more than one week, multiples of the weekly restrictions must be used to calculate the maximum amounts that may be garnished. The table and examples at the end of this fact sheet illustrate these amounts. Percent of weekly disposable income that can be taken. Credit card and medical bills, personal loans and most other consumer debts. The Internal Revenue Service will determine the amount taken based on standard deductions and the number of dependents you have.

Note: State laws around garnishment vary greatly. Your state may have additional protections that shelter more of your income or bank account balance, or it may offer exemptions for situations like being head of household with dependent children. In most cases, debtors must learn about exemptions and ask for them on their own.

Nonwage garnishment, which is less common, is generally less regulated and has fewer restrictions for creditors. You have to be legally notified of the garnishment. Some forms of income, such as Social Security and veterans benefits, are exempt from garnishment as income. However, they could be subject to seizure once in your bank account.

First, carefully read the judgment to verify that all of the information is accurate. If it is, consider how much money will be taken and what it will mean for your financial situation. Then weigh what to do next. You have three main options:. Contact your creditors. It does not, however, protect an employee from discharge if the employee's earnings have been subject to garnishment for a second or subsequent debts.

Title III applies to all individuals who receive personal earnings and to their employers. June 2. May 2. April 2. March 2. February 2. January 2.

December 2. November 2. February 3.