Reading a Garnishment Order Means Running Two Caps and Taking the Smaller One

A garnishment order arrives at a payroll department, and the first question anyone asks is how much of the paycheck survives. The federal answer is not a single number. Federal law writes down two separate caps, applies both to the same paycheck, and uses whichever one produces the smaller deduction.

Because there are two caps, there is a crossing point where they trade places. Below it, one formula decides the answer; above it, the other does. That crossing point is written nowhere in the statute. It falls out of the arithmetic, and it lands on a round quantity: forty times the federal minimum hourly wage.

Two Caps in One Sentence

The governing text is 15 U.S.C. 1673(a), part of the Consumer Credit Protection Act. The subsection is headed "Maximum allowable garnishment," and it says that "the maximum part of the aggregate disposable earnings of an individual for any workweek which is subjected to garnishment may not exceed" one of two figures.

The first, in paragraph (1), is "25 per centum of his disposable earnings for that week."

The second, in paragraph (2), is "the amount by which his disposable earnings for that week exceed thirty times the Federal minimum hourly wage prescribed by section 206(a)(1) of title 29 in effect at the time the earnings are payable."

Then comes the two-word instruction that does all the work: "whichever is less."

Read as a machine, the subsection is a minimum function. Compute a percentage. Compute an excess over a floor. Take the smaller. The percentage cap scales with earnings from the first dollar; the floor cap is zero until earnings clear thirty times the minimum wage, then climbs dollar for dollar. Two lines with different starting points and slopes cross exactly once.

What "Disposable Earnings" Means Here

Both caps run on disposable earnings, not gross pay, and the definition is narrower than most people assume. Under 15 U.S.C. 1672(b), disposable earnings are "that part of the earnings of any individual remaining after the deduction from those earnings of any amounts required by law to be withheld."

The operative words are "required by law." The Department of Labor's Wage and Hour Division, in Fact Sheet #30, describes disposable earnings as "the amount of earnings left after legally required deductions are made," and lists items that are not subtracted first: "voluntary wage assignments, union dues, health and life insurance, contributions to charitable causes, purchases of savings bonds, retirement plan contributions (except those required by law)." Directing a large share of pay into elective benefits does not shrink the base the formula runs on.

The underlying term is broad. Section 1672(a) defines earnings as "compensation paid or payable for personal services, whether denominated as wages, salary, commission, bonus, or otherwise, and includes periodic payments pursuant to a pension or retirement program." Fact Sheet #30 adds that for tipped employees, "the cash wages paid directly by the employer and the amount of any tip credit claimed by the employer under federal or state law are earnings for the purposes of the wage garnishment law."

Where the Two Caps Cross

The Department of Labor states that "The federal minimum wage is $7.25 per hour effective July 24, 2009." Thirty times that figure is $217.50, the weekly floor the second cap measures against.

Now set the two caps equal. Twenty-five percent of disposable earnings equals disposable earnings minus thirty times the minimum wage exactly when three-quarters of disposable earnings equals thirty times the minimum wage — that is, when disposable earnings reach forty times the minimum wage. At $7.25 an hour that is $290.00, and both caps then agree: 25 percent of $290.00 is $72.50, and $290.00 minus $217.50 is also $72.50.

Below $290.00 of weekly disposable earnings the excess-over-$217.50 figure is smaller, so it governs; above $290.00 the 25 percent figure is smaller and governs instead. Fact Sheet #30 prints exactly this three-band structure for a weekly pay period: "$217.50 or less" produces "NONE"; "More than $217.50 but less than $290.00" allows the "Amount ABOVE $217.50"; and "$290.00 or more" allows a "MAXIMUM 25%."

One caution about that $290.00 figure. It equals forty hours at the federal minimum wage, and the match is exact, but the test runs on disposable earnings rather than gross pay. A worker who grosses precisely $290.00 has less than that after legally required withholding, which places the paycheck below the crossing point rather than on it. The round number marks where the formulas trade places, not where any particular worker stands.

Longer Pay Periods Come From a Regulation, Not the Statute

Section 1673(a) is written entirely in terms of a workweek, and most people are not paid weekly. Congress handled the gap by delegating it. The same subsection closes with this: "In the case of earnings for any pay period other than a week, the Secretary of Labor shall by regulation prescribe a multiple of the Federal minimum hourly wage equivalent in effect to that set forth in paragraph (2)."

That regulation is 29 CFR 870.10, titled "Maximum part of aggregate disposable earnings subject to garnishment under section 303(a)." It says the weekly formula "must be transformed to a formula applicable to such earnings providing equivalent restrictions on wage garnishment," and gives the method plainly: "The number of workweeks, or fractions thereof, should be multiplied times the applicable Federal minimum wage and that amount should be multiplied by 30."

It then supplies the one convention the method cannot derive on its own: "For purposes of this formula, a calendar month is considered to consist of 4 1/3 workweeks."

This distinction is easy to misattribute. The statute supplies 25 percent, thirty times the minimum wage, and "whichever is less." The regulation supplies the method for non-weekly periods and the 4 1/3 convention. The familiar dollar figures — $217.50, $435.00, $471.25, $942.50 — are printed in Fact Sheet #30. The regulation's own tables use minimum wage rates of $3.35, $3.80 and $4.25, dated 1981, 1990 and 1991.

Four Pay Periods, Four Floors

Run the regulation's method at $7.25 an hour and the published figures appear. One workweek gives 1 x 30 x $7.25, or $217.50. A biweekly period is two workweeks: $435.00. A month is 4 1/3 workweeks by the regulation's convention, so 4 1/3 x 30 x $7.25 is $942.50. A semimonthly period is half a month, and half of $942.50 is $471.25. Those are the four numbers Fact Sheet #30 tabulates.

The crossing point moves with them, because it is always the floor divided by three-quarters. Weekly, $217.50 divided by 0.75 is $290.00; biweekly, $435.00 gives $580.00. Semimonthly, $471.25 gives $628.3333, and the fact sheet prints the boundary as "$628.33." Monthly, $942.50 gives $1,256.6667, printed as "$1256.66," without a comma.

Four worked examples, using the lesser-of rule each time:

• Weekly, $268.40 disposable. Excess over $217.50 is $50.90. Twenty-five percent is $67.10. The lesser is $50.90, so $50.90 may be garnished and $217.50 remains. Anywhere in this band, the remainder is exactly the floor.
• Weekly, $412.00 disposable. Excess over $217.50 is $194.50. Twenty-five percent is $103.00. The lesser is $103.00, leaving $309.00.
• Biweekly, $624.80 disposable. Excess over $435.00 is $189.80. Twenty-five percent is $156.20. Past the $580.00 crossing point, the percentage governs: $156.20 garnished, $468.60 remaining.
• Semimonthly, $600.00 disposable. Excess over $471.25 is $128.75. Twenty-five percent is $150.00. Below the $628.33 boundary, the excess governs: $128.75 garnished, $471.25 remaining.

Fact Sheet #30 works a weekly case the same way: gross earnings of $263, "the disposable earnings are $233.00," and "$15.50 may be garnished, because only the amount over $217.50 may be garnished where the disposable earnings are less than $290." Twenty-five percent of $233.00 would have been $58.25 — the larger figure, and therefore not the one that applies.

The monthly boundary is where the arithmetic gets unusually tight. At disposable monthly earnings of exactly $1,256.66, the excess over $942.50 is $314.16, while 25 percent is $314.165. The two caps sit half a cent apart, and section 1673(a) settles it without a tiebreaker: the maximum is whichever is less. Readers of our piece on what a single dollar does at an IRMAA line will recognize the shape, though here the consequence is fractions of a cent.

A Fixed Month Against Months That Are Not Fixed

The 4 1/3 convention is a stipulation rather than an observation. Calendar months contain 28, 29, 30 or 31 days — 4 to about 4.43 workweeks. The regulation fixes the count at 4 1/3 for every month of the year.

The consequence is easy to compute. A monthly-paid worker's floor is $942.50 in every month. Counting actual days at 30 x $7.25 per workweek, a 31-day month would give 31/7 workweeks, or $963.21 — $20.71 more. A 28-day February would give exactly 4 workweeks, or $870.00 — $72.50 less, precisely one week's floor. The fixed convention sits between those and does not move.

Support Orders Run on a Different Set of Numbers

Everything above describes ordinary consumer debt. Section 1673(b) carves out three categories where the subsection (a) caps do not apply: "any order for the support of any person issued by a court of competent jurisdiction or in accordance with an administrative procedure"; "any order of any court of the United States having jurisdiction over cases under chapter 13 of title 11"; and "any debt due for any State or Federal tax."

For support orders, section 1673(b)(2) substitutes a different pair of percentages with no thirty-times floor underneath. The figure is "50 per centum of such individual's disposable earnings for that week" where the individual "is supporting his spouse or dependent child (other than a spouse or child with respect to whose support such order is used)," and "60 per centum" where the individual "is not supporting such a spouse or dependent child described in clause (A)."

Each figure rises by five points in one defined circumstance. The statute says the 50 percent "shall be deemed to be 55 per centum" and the 60 percent "shall be deemed to be 65 per centum," but only "if and to the extent that such earnings are subject to garnishment to enforce a support order with respect to a period which is prior to the twelve-week period which ends with the beginning of such workweek." That window is measured backward from the start of the workweek being garnished — a narrower condition than simply being behind on payments.

A job-protection provision sits alongside the dollar caps. Under 15 U.S.C. 1674(a), "No employer may discharge any employee by reason of the fact that his earnings have been subjected to garnishment for any one indebtedness." The phrase "any one indebtedness" is doing real work in that sentence.

Numbers to Re-check

Almost every dollar figure here is derived rather than written down, so each depends on an input that can change.

The minimum wage input. Every floor here traces back to $7.25 an hour. Section 1673(a)(2) points to the wage "in effect at the time the earnings are payable," so if that rate changes, $217.50, $435.00, $471.25, $942.50 and all four crossing points move with it. The ratios do not: per workweek the crossing point stays at forty times the hourly wage, the floor thirty times.

The published table. Fact Sheet #30 is a Wage and Hour Division publication, not the statute or the regulation. Its band boundaries — including "$628.33" and "$1256.66," the printed forms of repeating decimals — should be read against the current version rather than a copy.

Your own pay period. The four tabulated periods are weekly, biweekly, semimonthly and monthly. A pay arrangement matching none of them is not covered by the table, and 29 CFR 870.10 gives a method rather than a figure for it.

State law. Fact Sheet #30 states that "If a state wage garnishment law differs from the wage garnishment provisions of the CCPA, the law resulting in the lower amount of earnings being garnished must be observed." The federal calculation is a ceiling, not a prediction of the deduction.

Where This Doesn't Apply

Federal and state tax debts. Section 1673(b)(1)(C) removes "any debt due for any State or Federal tax" from the subsection (a) caps, and Fact Sheet #30 confirms the limitations "do not apply to certain bankruptcy court orders, or to debts due for federal or state taxes." Federal tax levies run on a separate mechanism: the IRS publishes Publication 1494, "Tables for Figuring Amount Exempt from Levy on Wages, Salary, and Other Income" (Rev. 12-2025), organized by filing status and pay period rather than by a percentage of disposable earnings.

Chapter 13 bankruptcy orders. Section 1673(b)(1)(B) excludes orders of a United States court "having jurisdiction over cases under chapter 13 of title 11" from the subsection (a) caps.

Support orders. As above, these use the 50/55/60/65 percentage structure of section 1673(b)(2) and are not subject to the thirty-times floor.

States the Secretary has exempted. Under 15 U.S.C. 1675, the Secretary of Labor "may by regulation exempt from the provisions of section 1673(a) and (b)(2) of this title garnishments issued under the laws of any State" upon determining the state's restrictions are substantially similar. And 15 U.S.C. 1677, headed "Effect on State laws," addresses state laws "prohibiting garnishments or providing for more limited garnishment than are allowed under this subchapter."

Money that is not earnings. Section 1672(a) reaches compensation for personal services and periodic pension or retirement payments. Funds outside that definition are outside this calculation, and a lump sum already sitting in a bank account raises different questions than a paycheck does. The same care about what a formula takes as input appears in our look at the fixed thresholds inside the Social Security combined-income test.

Why the Shape Is Worth Knowing

Threshold rules in American personal finance usually work by stepping: cross a line and a fixed amount changes, as happens when income crosses a Saver's Credit tier boundary. The garnishment cap is built differently. Nothing jumps at $290.00. The two formulas meet there at the same value, and all that changes is which one is the smaller of the pair.

That is why the remainder behaves as it does. Anywhere between $217.50 and $290.00 of weekly disposable earnings, the worker is left with exactly $217.50, because the cap is the excess above that figure. Past $290.00 the remainder grows again at 75 cents per additional dollar. Flat, then sloping — a shape produced entirely by two caps and the phrase "whichever is less."

This article explains how federal wage garnishment limits are calculated and where the figures come from. It is general information, not financial or legal advice, and it does not describe any individual's situation. Garnishment outcomes depend on state law, the type of debt, and the terms of a specific order. Anyone facing a garnishment should consult a qualified professional about their own circumstances. Statutory and regulatory text should be verified against the current official versions: 15 U.S.C. 1673, 29 CFR 870.10, and Wage and Hour Division Fact Sheet #30.