Disposable Earnings are the portion of an employee’s income remaining after mandatory deductions, such as federal and state taxes, available for additional deductions like garnishments.
- What are disposable earnings?
Answer: They are the income left after mandatory tax deductions. - What deductions are excluded from disposable earnings?
Answer: Exclusions include federal and state income taxes and Social Security. - How are disposable earnings used?
Answer: They are used to calculate limits for wage garnishments. - What is the legal limit for garnishment of disposable earnings?
Answer: Under federal law, it is typically 25% or the amount above 30 times the minimum wage. - Who determines disposable earnings?
Answer: Employers calculate it based on payroll records.
