How to Calculate Disposable Income for Wage Garnishment

To calculate disposable income for wage garnishment, start with your gross pay for the pay period and subtract only the deductions the law requires your employer to withhold: federal, state, and local income taxes, Social Security and Medicare, and any mandatory government retirement contribution. What’s left is your disposable earnings, and it is the figure federal garnishment caps apply to. It is usually larger than your take-home pay because voluntary deductions such as health insurance and 401(k) contributions stay inside it.

What Disposable Earnings Means Under Federal Law

The Consumer Credit Protection Act defines disposable earnings as compensation left after deductions required by law. Compensation is defined broadly and covers wages, salary, commissions, bonuses, and vacation pay.1Office of the Law Revision Counsel. 15 USC 1672 – Definitions If your employer pays it in exchange for your personal services, it belongs in the starting gross figure.

Only deductions a government authority requires reduce that figure:

  • Federal income tax withheld based on your W-4.
  • State and local income taxes, wherever required.
  • Social Security and Medicare, the combined 7.65 percent FICA withholding.
  • State unemployment insurance in states that mandate an employee contribution.
  • Mandatory government retirement contributions when a statute or ordinance requires a public-sector employee to contribute.2U.S. Department of Labor. Fact Sheet 30 – Wage Garnishment Protections of the Consumer Credit Protection Act

Deductions That Do Not Count

Health insurance premiums, life insurance, 401(k) or 403(b) contributions, union dues, and charitable donations are voluntary for garnishment purposes.2U.S. Department of Labor. Fact Sheet 30 – Wage Garnishment Protections of the Consumer Credit Protection Act It doesn’t matter whether the deduction is automatic, whether you set it up years ago, or whether it feels essential. If a government entity didn’t require it, the law treats it as a personal choice and leaves it inside the disposable earnings total.

The rule is short. Required by law: subtract it. Chosen by you or your employer: leave it in.

The Federal Cap for Consumer Debts

Once you have the disposable earnings figure, federal law caps what a creditor can take for ordinary consumer debts such as credit cards, medical bills, and personal loans. The maximum per workweek is the lesser of two amounts:3Office of the Law Revision Counsel. 15 USC 1673 – Restriction on Garnishment

  • 25 percent of your disposable earnings for that week, or
  • The amount by which your disposable earnings exceed 30 times the federal minimum wage, which is $7.25 × 30 = $217.50 per week.

Whichever calculation produces the smaller number is what the creditor gets. If your weekly disposable earnings are $217.50 or less, nothing can be garnished. Between $217.50 and $290.00, only the amount above $217.50 is available. Above $290.00, the 25 percent cap always wins because it produces the smaller figure.

Working Through Two Examples

Say your weekly disposable earnings come to $500. Twenty-five percent of $500 is $125.00. The second test, $500 minus $217.50, equals $282.50. The creditor gets $125.00, the lesser of the two.3Office of the Law Revision Counsel. 15 USC 1673 – Restriction on Garnishment

Now take a lower earner with $230.00 in weekly disposable income. Twenty-five percent of $230 is $57.50. The second test, $230 minus $217.50, is $12.50. Only $12.50 can be garnished. That “lesser of” rule is what shields workers whose earnings sit close to the protected threshold.

Thresholds for Longer Pay Periods

The statute is written in weekly terms, but the Department of Labor scales the protected threshold for other pay frequencies using multiples of the federal minimum wage:4eCFR. 29 CFR 870.10 – Maximum Part of Aggregate Disposable Earnings Subject to Garnishment

  • Bi-weekly: $435.00 is protected (60 × $7.25); the 25 percent cap takes over above $580.00.
  • Semi-monthly: $471.25 is protected (65 × $7.25); the 25 percent cap takes over above $628.33.
  • Monthly: $942.50 is protected (130 × $7.25); the 25 percent cap takes over above $1,256.67.

The math is the same at every frequency: run both tests, apply the smaller number.

Higher Caps for Child Support and Alimony

Court-ordered child support and alimony sit outside the 25 percent consumer-debt cap.5Office of the Law Revision Counsel. 15 USC 1673 – Restriction on Garnishment The maximum depends on your household and whether you’re behind:

  • 50 percent of disposable earnings if you are supporting another spouse or dependent child.
  • 60 percent if you are not.
  • Add 5 percentage points (to 55 or 65 percent) if you are more than 12 weeks behind on payments.5Office of the Law Revision Counsel. 15 USC 1673 – Restriction on Garnishment

The 30-times-minimum-wage floor that protects low earners from consumer debt garnishment does not apply to support orders. A court can order support payments even when disposable earnings fall below that threshold.

Student Loans and Tax Debts Use Different Formulas

For defaulted federal student loans, the Department of Education can garnish up to 15 percent of your disposable pay through administrative wage garnishment, without going to court.6Office of the Law Revision Counsel. 20 USC 1095a – Wage Garnishment Requirement The 30-times-minimum-wage floor still applies, so the garnishment cannot drop you below $217.50 per week.7eCFR. 34 CFR Part 34 – Administrative Wage Garnishment You must receive at least 30 days’ written notice before garnishment begins, with a chance to inspect records, propose a repayment plan, or request a hearing.

Federal and state tax debts are fully exempt from the standard CCPA caps.5Office of the Law Revision Counsel. 15 USC 1673 – Restriction on Garnishment The IRS uses its own formula, publishing exempt-from-levy amounts annually in Publication 1494 based on filing status and number of dependents. For tax year 2026, the standard deduction that feeds that calculation is $16,100 for single filers, $32,200 for married couples filing jointly, and $24,150 for heads of household.8Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 Everything above the exempt amount can be taken until the debt is paid.

State Law Can Protect More of Your Pay

The federal limits are a floor. Many states set lower caps, protect more income, or prohibit wage garnishment for consumer debts almost entirely. Whichever rule leaves you with more of your paycheck is the one that applies. Before relying on the federal calculation alone, check your state labor department’s rules or ask a local attorney, because your actual protected amount may be higher than the federal math suggests.