Wednesday, October 17, 2007

Payroll & Garnishment:

In a company, payroll is the sum of all financial records of salaries, wages, bonuses, and deductions.
A pay stub, paystub, pay slip, pay advice, or sometimes paycheck stub, is a document that an employee receives either as a notice that the direct deposit transaction has gone through, or as part of their paycheck. It will typically detail the gross income and all taxes and any other deductions such as retirement plan contributions, insurances, garnishments, or charitable contributions taken out of the gross amount to arrive at the final net amount of the pay, also including the year to date totals in some circumstances.
A garnishment is a means of collecting a monetary judgment against a defendant by ordering a third party (the garnishee) to pay money, otherwise owed to the defendant, directly to the plaintiff.
Wage garnishment, the most common type of garnishment, is the process of deducting money from an employee's monetary compensation (including salary) as a result of a court order. In the United States, such payments are limited by federal law to 25 percent of the disposable income that the employee earns. Garnishments can be taken for any type of debt but common examples of debt that result in garnishments include:
• child support
• taxes
• Unpaid Court Fines
• any other type of money judgment
When served on an employer, garnishments are taken as part of the payroll process. When processing payroll, sometimes there is not enough money in the employee's net pay to satisfy all of the garnishments. In such a case, the correct order to take a garnishment must be satisfied. For example, in a case with federal tax, local tax, and credit card garnishments, the first garnishment taken would be the federal tax garnishments, then the local tax garnishments, and finally, garnishments for the credit card.
The other type of garnishment, also known as attachment, (or attachment of earnings), requires the garnishee to deliver all the defendant's money and/or property in the hands of the garnishee at the time of service of process to the court, to be paid over to the plaintiff. Since this type of garnishment is not continuing in nature, but is not subject to the type of restrictions that apply to wage garnishment, it is most often used against banks, or other persons or companies that incur liquidated obligations in the regular course of business.

1 comment:

Unknown said...

A garnishment is a means of collecting a monetary judgment against a defendant by ordering a third party (the garnishee) to pay money, otherwise owed to the defendant, directly to the plaintiff.


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