Page 237 - Essentials of Payroll: Management and Accounting

ESSENTIALS of Payr oll: Management and Accounting
Of the amounts listed on the remittance advice, the medical insur-
ance and 401(k) deductions are voluntary and so cannot be included in
the calculation of disposable earnings.This increases Mr. Evans’s dispos-
able earnings to $625. The payroll manager then multiplies this amount
by 60 percent, which is the maximum amount of disposable earnings

that can be remitted for child support. The result is $375, which is $15
less than the $390 listed on the court order.The payroll manager begins
deducting and remitting $375 per week.
When a child support court order is received, it takes precedence
over all other types of garnishment orders,with the exception of tax levies
that were received prior to the date of the court order.An employer must
begin withholding the maximum allowable amount from an employee’s

pay no later than the first pay period beginning 14 working days after
the posted date of the court order,and must continue to withhold funds
until the order is rescinded by the court.
A common point of confusion is where to send child support pay-
ments. Contrary to any demands by the parent who is designated to
receive the payments, they typically go to a court-designated person,
who then disburses the funds to the recipient parent—payments never
go straight to that parent. Instructions for remitting funds will be listed
on the court order; the employer should follow these instructions to

the letter.
An employer can charge an employee an administrative fee for
withholding child support from his or her paycheck. The amount is
mandated by state law, and is itemized in Exhibit 8.1. The fee can only
be taken from an employee’s remaining wages after the support payment
amount has already been withheld.
If an employee leaves the company before the obligations of a court

order are discharged, the employer is obliged to notify the issuing
enforcement agency of the employee’s last known address, as well as the

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