Involuntary & Voluntary
Deductions
 Notice
of Levy - Form 668-W
Part 2 thru 5 must be given to employee
Part 2 – Employee copy
Part 3 – to be received back from EE,
completed and sent to IRS
Part 4 – to be received back from EE,
kept
 Unemployment
compensation
 Workers Compensation
 Railroad Retirement Act pension and
annuities
 Some armed services personnel
retirement and disability payments
 Certain Public Assistance Payments
 Child Support Order ALREADY on the
books (received prior to the levy)
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Use part 4 of form 668-W to determine the
number of exemptions claimed – do not
use Form W4
Obtain IRS Pub. 1494 Table for Figuring
Amount Exempt from Levy on Wages,
Salaries, and Other Income
Based on the pay period and number of
exemptions claimed, determine the
exempt amount
If you do not receive the completed parts
3 & 4 the exempt amount is determined
using the Married Filing Separate bracket
on Pub. 1494


Take-home pay is the amount of an employee’s wages
that remains after all normal deductions in effect at the
time a levy is received have been subtracted from the
gross pay
Pre-existing deductions
• If deductions increase as a result of a pay increase, continue to
subtract from gross wages
• If deductions increase as a voluntary decision by employee, do
not subtract increase amount from gross wages

Example: an employee with a 3% 401K deduction
cannot increase their percentage. However, if they
receive a pay increase, the resulting additional 401K
amount is allowed as a subtraction from gross wages
 Form
668-D, Release of Levy/Release of
Property from Levy – the form will
include the final payment amount
 Voluntary Deduction Agreement –
Form 2159
 Uniform Withholding
Notice for Child
Support
 Start withholding based on the effective
date OR 14 days of the order date
 Disposable Pay –
all deductions
required by LAW –
not benefits, might
vary by state
 50%
EE is Married
 60% EE is Single
 55% EE is Married +12 weeks in arrears
 65% EE is Single +12 weeks in arrears
 Total of all support orders has to be at or
below the maximums – state limits may
be lower
 State
law governs the multiple orders are
handled. If the orders are from different
states – work state law applies .
 Allocation methods for multiples:
• Allocate based on percentage
• Allocate equally
• 1st come/1st serve
 Internet
accessible way of obtaining,
accepting, rejection, termination & lump
sump payments
 Medical Insurance Support Provision – by
state. Non custodial parent provides
medical insurance coverage (at equal
cost as other employees) for their
children.
 Governed
by Federal and State law
 Under the DOL, W&H Division
 Consumer Credit Protection Act, Title III
• Restricts states regulations
• Restricts amount that can be garnished
• Employee may not be
terminated because of
their wages being
garnished
 Covered
in CCPA
• Administrative Wage Garnishment
• Alimony
• Child & Medical Support
• Creditor Debt
• Student Loan
 25%
of weekly disposable earnings OR
amount over the 30 times federal
minimum wage (30x7.25=217.50)
 Order
is from court – until received,
employer pays all garnishments in place.
Once received all orders stop EXCEPT
child support.
 Bankruptcy order supersedes all orders
including levies.
 Once received all bankruptcy orders are
paid to trustee that delegates the funds –
again, exception is child support.
 Higher Education Act allows garnishment
 Max for single garnishment is 15% or 30x
federal minimum wage
 Max for multiple garnishments is 25% or
30x federal minimum wage
 Can not discharge, 30 day notice before
start of garnishment
 Termed EE who is rehired in 12 mo’s is
given 12 additional mo’s from
reemployment before garnishment can be
put into effect.
 Non
tax debt
 Agency will provide 30 day notice.
 Limits are the same as loans (15% on one,
25% on multiple, or 30X federal minimum
wage)
1. Child support
2. Bankruptcy
3. Federal administrative garnishments*
4. Federal tax levies*
5. Student loan**
6. State tax levies
7. Local tax levies
8. Creditor garnishments
9. Employer deductions (e.g., for benefits)
10. Employee voluntary deductions
*All deductions in effect when a federal admin. Wage
garnishment or fed. tax levy is received have priority over
the order
**The law provides no guidance, but the Dept. of Ed allows child
support to have priority
 Contact
Bankruptcy trustee if there are
any questions on support orders or any
other garnishments
 All orders are legal documents - any
omissions may result in fines and
penalties on the employer
 Never deduct more than what’s allowed
by law
 Board, lodging, and
other facilities
provided by the employer for the
employee’s benefit may be deducted
even if the employee’s wages will then be
below the minimum wage. The
employee’s participation must be
voluntary.
• Facilities are board, lodging, meals, housing, etc.
• Facilities ARE NOT tools, required uniforms,
company provided security, etc.
 Section
9.1-7
 Wage
Assignments – agreement with a
creditor in lieu of garnishment – state
laws may apply
 Union Dues – based on collective
bargaining agreement
 US Savings Bonds – Not allowed to be
thru direct deposit as of 2011
 Donations
from payroll of $250 or greater must
be substantiated
• Must include: amount of cash and noncash
contributed, whether goods or services were
provided in return, description and estimate of value
of services
• Documents include: pay stub, W2,
document from org., pledge card
 $250
is applied to each
deduction separately