A garnishment order lands on your desk and the clock starts running. Someone else decided this employee owes money, a court or an agency put it in writing, and now you are the one responsible for taking the right amount out of the right paycheck, sending it to the right place, and doing it all inside a legal window. Get it wrong and the penalty often falls on the employer, not the employee. That is a lot of pressure for a piece of paper you did not ask for.
It gets harder when more than one order shows up for the same person, or when the math on what you can legally withhold is not obvious, or when an order is satisfied and you need to stop the deduction cleanly. These are the moments where a small setup mistake becomes a compliance problem, and where guessing is expensive.
The good news is that garnishments follow rules, and ADP Workforce Now is built to apply those rules once you set them up correctly. This guide walks through the main types of garnishments, how to handle an order when it arrives, how disposable earnings and legal limits work, how to prioritize when several orders compete, how remittance happens, and how to stop a garnishment the right way. Treat this as a map of the process, and confirm the specifics of any order with your licensed advisor or ADP representative, because the rules change and vary by state.
Not all garnishments behave the same way, and the type drives almost everything else.
Child support is the most common and usually carries the highest priority. It comes on a standardized income withholding order and often includes both a current support amount and a past-due, or arrears, amount. Tax levies come from the IRS or a state or local tax authority to collect unpaid taxes, and they follow their own calculation rules rather than the usual percentage limits. Creditor garnishments result from a court judgment for things like an unpaid loan or a medical bill. Student loan garnishments and other administrative wage garnishments come from federal or state agencies and have their own caps. Bankruptcy orders can actually redirect or pause other garnishments, so they deserve special care.
Before you set anything up, identify which type you are holding. The type tells you the priority, the limit, and where the money goes.
Intake is where compliance is won or lost. When an order comes in, log the date you received it, because your compliance window often starts then. Read it for the essentials: the employee, the amount or percentage, the effective date, the payee and remittance address, any case or account number, and whether there is an end condition or a total balance.
Confirm the employee actually works for you and is being paid. If the person does not work for you, most orders require you to respond and say so rather than simply ignoring the notice. Many orders also require you to notify the employee that a withholding has begun, and some come with a form for exactly that. Do not sit on an order while you figure it out. The window is usually short, and silence is treated as noncompliance.
This is the part people get wrong most often. Garnishment limits are almost never based on gross pay. They are based on disposable earnings, which are what is left after legally required deductions such as federal, state, and local taxes and mandated withholdings. Things like voluntary retirement contributions and health premiums are generally not subtracted before you calculate the garnishment, even though they reduce take-home pay.
Once you have disposable earnings, a cap applies. Federal law sets ceilings on how much can be withheld, and those ceilings differ by garnishment type. Child support allows a higher share of disposable earnings than an ordinary creditor garnishment, and the exact percentage can depend on whether the employee supports another family and how far behind they are. Creditor garnishments are held to a lower cap. Many states set their own limits that protect more of the employee's pay than federal law does, and when state and federal rules both apply, you generally follow the one more favorable to the employee. ADP Workforce Now can apply these calculations, but only if the order is set up with the right type and parameters. This is exactly where a wrong setting quietly produces a wrong check. The specific percentages and thresholds change, so verify them against current federal and state sources rather than memory.
With the order read and the limits understood, configure it in ADP Workforce Now as the matching garnishment type, not as a generic deduction. The type matters because it drives the calculation and the priority logic. Enter the amount or percentage as the order states, the effective date, and the payee information so remittance can flow. If the order has a total balance to collect, record it so the system can help you stop at the right point rather than over-collecting.
Double-check the disposable-earnings basis and the limit before you run the first payroll with the deduction live. A quick manual check of the first result against the order is worth the two minutes. If the withheld amount looks off, catch it before the check goes out, not after.
When one employee has multiple orders, priority is not first-come-first-served, and it is not your choice. The law sets the order. Child support generally comes first. Tax levies and other orders fall into place behind it, and timing can matter among orders of the same class. The total you withhold still cannot exceed the legal cap on disposable earnings, so when the orders together ask for more than the law allows, you withhold up to the cap and allocate it by priority rather than paying everything.
This is where employers get into trouble, because the arithmetic gets fiddly and the rules interact. ADP Workforce Now can help sequence multiple orders when each is set up with the correct type and priority, but the setup has to be right. When in doubt on priority, this is a good moment to get help rather than guess, because paying the wrong order first can leave you liable.
Withholding the money is only half the duty. You also have to send it to the payee within the required window, and that window can be tight, sometimes just a few days after the pay date. Each payee may want the money a specific way, with specific case numbers attached, so the agency can credit the right account. ADP Workforce Now supports garnishment remittance so payments and detail go where they belong on schedule, which keeps you out of the penalty zone.
Stopping is its own step. A garnishment ends when the balance is paid, when a release order arrives, or when a court or agency tells you to stop. Do not stop on the employee's word alone; wait for the order or the balance. When the end condition is met, deactivate the deduction promptly so you do not over-collect, and keep the record of when and why you stopped. Over-collecting is as much a problem as under-collecting, and a clean stop protects everyone.
A client called us the week a second garnishment arrived for one employee who already had a child support order in place. They were worried they would either shortchange a payee or take too much from the paycheck.
We worked from rounded, illustrative numbers. The employee had about $2,000 in disposable earnings for the period. The existing child support order asked for roughly $700. A new creditor garnishment then arrived asking for about $500. Adding those together would have crossed the legal cap on disposable earnings, so paying both in full was not allowed. We confirmed child support as the priority, made sure it was satisfied first, and applied only what remained under the cap to the creditor order. The child support payee received its full amount, the creditor received the smaller allowed portion, and the employee kept everything the law protects. We set both orders up in ADP Workforce Now with the correct types and priority so the sequencing held automatically going forward. The figures are illustrative, but the lesson is real: with multiple orders, the cap and the priority decide the split, not the size of each request.
"An employee says the garnishment is a mistake. Can I just stop it?" Not on their say-so. You must keep withholding under a valid order until you receive a release or other official instruction to stop, or until the balance is satisfied. Point the employee to the court or agency that issued the order to dispute it, and keep complying in the meantime. Stopping early can make you liable.
"What counts as disposable earnings?" Generally, gross pay minus legally required deductions like taxes and mandated withholdings. Voluntary items such as retirement contributions and insurance premiums usually are not subtracted before the garnishment is calculated, even though they lower take-home pay. Because definitions and treatment can vary, confirm the specifics for your situation with your licensed advisor or ADP representative.
"Can we charge a fee for processing garnishments?" Sometimes. Some states allow employers to charge the employee a small administrative fee, and the allowed amount and rules differ by state and by garnishment type. Check your state's rules before adding any fee, since getting this wrong is its own compliance issue.
A tight process removes the guesswork. Log every order the day it arrives and start any required response and employee notice right away. Identify the type before you configure anything, and set it up in ADP Workforce Now as that type so the calculation and priority follow the rules. Verify the disposable-earnings basis and the legal cap against current sources on the first run. Remit on time, with the right case detail, every period. Stop promptly and only on a valid release or a satisfied balance, and keep the record of why. Review your active garnishments periodically so nothing runs past its end.
Build those habits and garnishments stop being a source of dread. They become a routine you can defend, order by order.
We are former ADP service professionals, and we work with ADP exclusively. We have set up child support orders, tax levies, and competing creditor garnishments from the inside, so we know where the calculation and priority traps hide. When an order lands and your hair is on fire, you do not open a ticket and wait on hold. You get a dedicated consultant who knows ADP Workforce Now and helps you set the order up right, remit on time, and stop it cleanly. No tickets, no hold queues. We've got you.
Just got a garnishment order and not sure where to start? REQUEST A CONSULTATION (ignitehcm.com/solutions/compliance).
ADP and the ADP logo are registered trademarks of ADP, Inc. This article is general guidance only and is not legal or tax advice. Garnishment types, calculation methods, priority rules, remittance windows, and limits change and vary by federal, state, and local law; confirm the specifics of any order with your licensed advisor or ADP representative before acting.