Payroll > Set-up > Setting Up Garnishments on Wages
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Setting up Garnishments on Wages
Wage garnishment is the process of deducting money from an employee’s compensation, usually as a direct result of a court order. Garnishments will continue until the entire debt is paid or arrangements are made to pay off the debt. They can include tax arrears, child support, or outstanding debts to the crown.
To set up a garnishment, go to Payroll > Setup. On the left menu, select Deductions.
Click Add. The Add Deduction screen will open. Give this deduction a name. The deduction will require a remittance. Specify the liability account you will use to track the garnishment. If you haven’t already set on up, you can set it up on the fly in the account selector.
The employer rate for garnishment will always be 0.00. The employee is required to make the payment, and the employer simply acts as a third party supplier.
The CRA source will stay as Custom Deduction. Leave the T4 and RL-1 boxes as <none>. You will want to assign a Deduction grouping tag to this deduction, to keep it separate from any other custom deductions.
Click Save. The deduction will be added to your list.
On the left menu, you can now click on Employees/ROE.
Select your employee and click on Edit. Go to the Pay Types, Benefits and Deductions tab. You can add the deduction in the employee’s deduction section. You can set the default deduction, and whether it is based on a percentage of gross wages or a set amount per paycheque.
Save the employee and close the Payroll Setup screen.
Next, you will simply create paycheques that include that deduction.
Once the paycheques for the month have been recorded, you can run the remittance to pay this garnishment to the appropriate vendor. Go to Payroll > Remit Deductions. Click on your custom deduction on the left.
The custom deduction remittance works the same way as the source deduction remittance. You can click Print to print out the remittance report.
Save the remittance. Make sure you have the correct supplier selected. You can now enter the payment as normal to pay the vendor.
Last updated on July 18, 2017 by FCC AgExpert