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This article helps admins set up deductions from employee paychecks to cover wage garnishments, court orders, or other post-tax debts. You can create a one-time or ongoing deduction that repeats every pay period.
Garnishment is when money is taken from an employee’s paycheck to pay off a debt, usually because of a court order.
Important reminders about garnishments and other post-tax deductions:
- Custom deductions are always post-tax.
- If you need to set up pre-tax deductions, go to this article.
- Deductions start with the next pay period. If you have questions about a garnishment or income withholding order, contact the agency that sent the notice or your accounting professional.
- If you’ve received a court order to enroll dependents in health insurance, go to this article for next steps.
Expand the sections to learn more, or use CMD + F (or CTRL + F) to search for keywords throughout the article.
Use this method for single-payroll deductions that won’t repeat automatically.
To add one-time custom deductions while running a regular payroll:
- Sign in to Gusto.
- Go to Pay and select Run payroll.
- If you see Run payroll as a task in your dashboard, just click Let’s do it.
- Under Regular, click Run Payroll.
- Find the name of the employee for whom you’re adding a deduction.
- If you’re in the spreadsheet view: Go to the Deductions column for that person.
- If you’re in the legacy view: Click Actions (three dots) next to the employee. Select Add a deduction.
- Click anywhere in the Deductions field, then click Add a one-time deduction.
- Enter the desired description, amount type, and amount to withhold.
- If you need to enter more than one garnishment or deduction, click Add a one-time deduction again and fill out the same fields.
- Click Save.
To confirm the one-time deduction is in place after you run payroll:
- On the payroll's Summary page, click Cash Requirements Summary.
- Look under Total Other Deductions (Employee and Company).
You may be responsible for sending the deduction to the agency that ordered it. Go to the What to do with deducted garnishments section for next steps.
Use this method to set up deductions from an employee’s profile, whether the deductions are one-time or recurring.
To add a post-tax garnishment or deduction from an employee’s profile:
- Sign in to Gusto.
- Click People or use the search bar to enter the employee’s name.
- Click your employee’s name.
- Under Information, click Pay.
- Scroll to Garnishments or custom deductions and click Add.
- Under Deduction Type, select Garnishment or Custom Deduction (Post-Tax).
- For garnishment: Select the Garnishment Type. If you choose Other, add a description of the garnishment. Then, fill out any additional information.
- We’ll make these deductions from payroll and leave the money in your company account for you to pay directly to the collecting agency.
- For custom deduction: Enter a description of the deduction. Then, fill out any additional information.
- For garnishment: Select the Garnishment Type. If you choose Other, add a description of the garnishment. Then, fill out any additional information.
- Click Save & continue.
The employee’s profile will now show any garnishments or custom deductions. If you need to make changes in the future, click Edit next to each entry. Click Add to create a new entry.
The next time you run payroll, we’ll deduct the garnishment or custom deduction amount from your employee’s wages post-tax. The deduction will be a separate line item on the employee’s paystub.
You may be responsible for sending the deduction to the agency that ordered it. For the next steps, go to the What to do with deducted garnishments section.
Garnishment deductions are handled differently depending on the type and state.
Child support garnishments
For all states, except South Carolina:
- We will make the child support garnishment payment on your behalf.
- We deduct the amount of the garnishment from your company’s bank account.
- If your company has multiple bank accounts, we’ll deduct the money from the account you used to process that payroll.
For South Carolina:
- Deducted money remains in your company’s bank account.
- If your company has multiple bank accounts, the money remains in the account you used to process that payroll.
- If you’ve been ordered to send garnishments to any agencies, that is your responsibility.
All other garnishments (except child support)
- Deductions remain in your company’s bank account.
- If your company has multiple bank accounts, the money remains in the account you used to process that payroll.
- If you’ve been ordered to send garnishments to any agencies, that is your responsibility.
Sometimes, you may need to stop deducting a garnishment or deduction from an employee’s payroll.
To remove a post-tax garnishment or deduction:
- Sign in to Gusto.
- Go to People.
- Click your employee’s name.
- Under Information, click Pay.
- Scroll to Garnishments or custom deductions, and click Edit next to the garnishment.
- Make your change:
- To temporarily stop the deduction: Reduce the Amount to Withhold to $0.00, then click Save & continue.
- To permanently stop the deduction: Click Delete this Deduction.
Primary and Full Access admins can set up post-tax deductions for an employee’s child support wage garnishment.
Before you start, make sure you have the garnishment order with the Child Support Enforcement (CSE) case number and withholding amount. Contact the agency directly if you can’t find the case number. Check the State Case ID formatting section for formatting requirements.
It’s important to enter all details accurately when adding an automatic child support garnishment.
To set up a child support garnishment:
- Sign in to Gusto.
- Go to People.
- Click your employee’s name.
- Under Information, click Pay.
- Scroll to Garnishments or custom deductions and click Add.
- Select Garnishment as the deduction type.
- Select Child Support as the garnishment type.
- In the Agency field, select the state agency listed on the order received.
- In the County field, select the county listed on the order received (if applicable).
- Florida, New York, and Illinois are the only states that require this.
- Enter the CSE case number found on the order you received.
- Enter the Total Amount to Withhold found on the order.
- Make sure the amount you enter aligns with the pay period you pick in the next step.
- Under Per, select the frequency listed in the order.
- This should align with the amount you entered in the previous step.
- We’ll calculate the per-paycheck amount to be withheld, even if this frequency is different from your employee’s regular pay schedule.
- Under Max Paycheck Percentage, select the maximum percentage of your employee’s paycheck we should withhold. This info is listed in the order.
- Click Save & Continue.
- The next time you run payroll, we’ll deduct this amount from your employee’s wages post-tax.
- We’ll automatically deduct this amount from every future payroll until you remove the garnishment from the employee’s profile.
- We’ll list the deduction as a separate line item on the employee’s paystub.
Federal rules indicate that you can’t withhold more than 50% of an employee’s take-home pay (after taxes) if they’re supporting other dependents in a different household. If they are not supporting anyone else, you can take up to 60%. If your employee is more than 12 weeks behind on child support (this is called being in “arrears”), the limit can go up to:
- 55% if they’re supporting other dependents
- 65% if they’re not
Check the income withholding order to see if it says the employee is more than 12 weeks behind.
State Case ID formatting
| State | Case ID formatting |
| Alabama | Enter Case ID exactly as shown on the child support order. |
| Alaska | Enter Case ID exactly as shown on the child support order. |
| Arizona | Case ID is 12 digits and is numeric only. |
| Arkansas | Case ID is 9 digits — court docket numbers cannot be used to identify a case. |
| California | Case ID is 12 – 15 digits (numeric). Do not enter dashes. |
| Colorado | Must include the 8-digit Case Identifier Number or the Child Support Family Support Registry (FSR). Do not report the court number, which is much longer and includes a JV or a DR in the middle. Do not report under the Social Security number (SSN) since employees can have multiple cases. |
| Connecticut | Case ID is the employee’s SSN. This is a mandatory field. |
| Delaware | Enter Case ID exactly as shown on the child support order. |
| District of Columbia | Employee’s case number — 10 digits. |
| Florida | Case ID is 13 digits (employee’s remittance ID/depository number). This number can be located on the employee's Income Deduction Order. |
| Georgia | Case ID is 9 digits, all numeric—Not the SSN, Federal Employer Identification Number (FEIN) or docket number. |
| Hawaii | Do not use asterisks (*) and backslashes (\). |
| Idaho | Case ID is 6 digits in length and must contain any leading zeros. |
| Illinois | Do not use the Case ID that start with a "C.” Use the Order ID, Docket ID or Remittance ID (usually starts with a year). It can be up to 17 characters, and is alphanumeric. |
| Indiana | All numeric with leading zeros is 10 digits. Without leading zeros, it can be 4 to 7 digits long. Payments will process correctly with or without the leading zeros. |
| Iowa | Case ID is all numeric. |
| Kansas | Case ID is 12 digits and is a mandatory field. |
| Kentucky | Enter Case ID exactly as shown on the child support order. |
| Louisiana | Enter Case ID exactly as shown on the child support order. |
| Maine | Enter Case ID exactly as shown on the child support order. |
| Maryland | Case ID is 9 digits — numeric only. |
| Massachusetts | Case ID is 9 digits. |
| Michigan | 9-digit Case ID number OR 10-digit Order ID number. |
| Minnesota | Use either the MCI number (10 digits) or case number (12 digits). Exclude any dashes. Include the preceding zeros. Usually ends with 01, 02, or 03. |
| Mississippi | Use the 9 numeric digits known as the METSS case number. Do not include any of the following: special characters, letters, or the word METSS. |
| Missouri | Case ID is 8 digits — numeric only. |
| Montana | Case ID is 7 digits. |
| Nebraska | Enter Case ID exactly as shown on the child support order. |
| Nevada | Case ID is 10 characters — 9 numbers, with one alpha at the end (usually an A or B). |
| New Hampshire | Enter Case ID exactly as shown on the child support order. |
| New Jersey | Case ID is 2 letters (always cs), 8 numbers, and a letter. |
| New Mexico | Case ID should never have any alpha character. |
| New York | NYS child support account number is required: 2 Letters 5 Numbers 1 Letter 1 Number. |
| North Carolina | MPI number is in the MPI. Leading zeros are not required. No letters. |
| North Dakota | Case ID is numeric only and can be up to 10 digits. |
| Ohio | SETS case number: 10-digit case identifier that begins with the number “7.” Order Number: Length varies. The court order identifier immediately follows the Case Number. |
| Oklahoma | Case ID is 12 digits — numeric only. Case remittance ID or family group number: “FGN” on IWO. 000######, and an additional extension that usually end in 001, 002, 003, etc. |
| Oregon | Starts with a zero and ends with 41. |
| Pennsylvania | Case ID is numeric only. |
| Rhode Island | Enter Case ID exactly as shown on the child support order. |
| South Carolina | Enter Case ID exactly as shown on the child support order. |
| South Dakota | Case ID is alphanumeric — 9 numbers followed by a letter. |
| Tennessee | Case ID is alphanumeric — 9 digits long. |
| Texas | Case ID is 10 digits starting with a zero or an “N.” |
| Utah | Case ID is 10 digits — will always start with the letter “C” are followed by 9 numbers. |
| Vermont | Case ID is 10 digits — first 9 digits are SSN. |
| Virginia | Enter Case ID exactly as shown on the child support order. |
| Washington | Enter Case ID exactly as shown on the child support order. |
| West Virginia | Case ID is numeric only. |
| Wisconsin | Case ID is always numeric — can be 4 to 7 seven digits. Might be referred to as the remittance ID or the KIDS Participant PIN on the state withholding order. |
| Wyoming | Case ID is numeric only. |
Managing child support garnishments involves more than just collecting deductions.
When to send payments to state agencies yourself
- If the garnishment came from the state of South Carolina, a tribal support agency, or a US territory, OR
- If the garnishment was collected on an off-cycle payroll
To send a payment yourself, follow the instructions on the garnishment order or contact the agency directly for assistance.
When we send payments to state agencies for you
As long as the garnishment did not come from South Carolina, a tribal support agency, or a US territory, we’ll send payments to the state agency for you during:
- Regular payrolls
- Transition payrolls (as a result of a pay schedule change)
- Dismissal payrolls
Agency payment timeline
We send garnishment payments to most state agencies 2 business days after the payroll check date. For Alabama child support, we send the payment 5 business days after the check date.
Bank transactions
In addition to the regular payroll debits (net pay, taxes, reimbursements), we combine all child support garnishments into one total amount. This total shows up as a separate debit and transaction line in your company’s bank account.
Past-due payments (payments in arrears)
If a garnishment order says that the employee owes past-due payments (“in arrears”), the agency usually includes that amount in the 'Total Amount to Withhold' along with the current child support.
If the past-due amount isn’t included in the total, contact the agency to find out how to pay it on the employee’s behalf.
Lump-sum payments
A lump-sum payment is a one-time payment to an employee. Examples include bonuses, commissions, severance, or unused vacation pay.
If an employee has an active child support order, some payments may need to be garnished. Requirements depend on the state and payment type. We may not automatically calculate child support on lump-sum payments like bonuses. You should check the garnishment amount and confirm it with the child support agency. Gusto does not send garnishment payments for bonus payrolls or off-cycle payrolls.
Learn more about lump-sum payments and state requirements.
We make it easy to handle child support deductions and view them in payroll and employee records.
Gusto's deduction calculation
We’ll use the information you entered from the withholding order and your employee’s regular pay schedule to determine the per-paycheck amount to be withheld. Learn more about Gusto's deduction calculation.
View deductions
As an admin, you can view deductions:
- When running payroll
- In payroll reports
- In an employee’s profile
- On an employee’s paystubs
- In the "Agency Payments" report
Employees can view their deductions:
- On their paystubs
- In the Pay tab of their employee profile, under Deductions.
We send garnishment payments to agencies 2 business days after the payroll check date. Once we send the payment, we cannot reverse the funds on your behalf. Contact the agency directly for questions about how to do this and the next steps.
If another payroll is run to fix the one you reversed, garnishment deductions will happen again if they’re turned on for that payroll.
If you dismiss or rehire an employee with a garnishment, there are important steps you need to take. This section explains your legal responsibilities when dismissing or rehiring, and how to comply with agency requirements.
Dismiss or terminate an employee with a garnishment
Legal requirement for dismissal
If you dismiss an employee with a garnishment order for any reason, the law says you must notify the agency of the dismissal right away. Each state has different rules, but it’s best to contact the agency within 5 days after you find out the employee will be dismissed or within 5 days after they leave, whichever happens first.
In some states, filling out the electronic termination application from the US Department of Health & Human Services is accepted to fulfill termination requirements. Other states may ask for more details or specific actions from you. Check out our article on dismissing or terminating an employee with a garnishment for more info.
Rehire an employee with a garnishment
If you rehire an employee with a garnishment, our system turns off all old garnishment settings. Based on the court order, you’ll need to enter the garnishment details again in the employee’s profile.
Some states also require reporting when you rehire an employee, so be sure to check the rules for your state.
You have several important tasks to follow once a child support order is in place. These may include:
- New hire and rehire reporting
- Verifying employment
- Handling medical support orders
- Withholding from lump-sum or bonus payments
- Withholding income
- We’ll use the info from the Set up an automatic child support garnishment section to determine how much to withhold, but you should still check that the amount matches the child support order.
- Sending payment(s) to the agency
- As long as you enter the deduction in Gusto as a child support garnishment and include the state agency, we’ll send the payments in all states except South Carolina. In that case, you must send the payment yourself
- Telling the state if the employee is dismissed
See the full list of employer duties from the US Department of Health & Human Services.
If an employee with a garnishment order gets hurt or sick and can’t work, tell the agency or court that sent the order. Provide the employee’s name and the name and address of whoever is paying workers’ compensation or disability benefits.
If your company isn’t paying those benefits, you usually don’t have to withhold child support. If you’re not sure, contact the agency to find out.
Sometimes, an employee may have more than one child support order, or you might even receive the same order more than once.
If you receive duplicate child support garnishment orders (for the same child)
If you get duplicate child support orders for the same child and employee, don’t make changes in Gusto right away. You’ll need to take a few steps first.
Employers that receive a duplicate withholding order must:
- Keep following the first order you received.
- Give a copy of the second order to the employee.
- Contact the agency or court that sent the second order. Let them know you’re already sending payments for the same child to a different place. Give them the payment details.
- Contact the agency or court from the first order to let them know you got a second one.
- Confirm if you need to do anything else.
If you receive multiple child support garnishment orders (for different cases or children)
You might get more than one child support order for an employee, for different children or cases. Don’t treat these as first-come, first-served. Each order must be handled properly based on state rules.
Example:
- The employee’s disposable income after taxes is $2,087.20.
- They have two garnishments, both with a 50% MPP.
- Garnishment 1 = $875
- Garnishment 2 = $925
- Both amounts are less than 50% (which is $1,043.60), so we’ll take both amounts ($875 + $925 = $1,800).
If there isn’t enough income left to cover all garnishments, follow your state’s rules to divide the money. Most states prioritize current child support, but each state is different.