How to Calculate Payroll Withholding

Based on federal limits on child support withholding

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Here’s an example of how to calculate payroll withholding for an employee who has been ordered to pay support.

The Consumer Credit Protection Act (CCPA) sets federal withholding limits for child support and alimony. These limits are based on your employee’s Aggregate Disposable Weekly Earnings (ADWE), which is calculated by subtracting from the employee’s gross earnings any taxes and mandatory retirement deductions. Health insurance premiums, union dues, other child support garnishments, and money owed to the employer are not deductible when determining ADWE.

Here’s an example: Your employee (the obligor—the person owing child support) has three separate child support cases and does not earn enough to pay the full obligation in each pay cycle. Perform the following calculations:

1.) Add up the obligor’s total child support obligation per month.

Case # 1 $260.00
Case # 2 $50.00
Case # 3 $121.00
Total $431.00


2.) Determine what the obligor’s ADWE is for that pay cycle. Let’s say it is $400.

3.) Determine what percentage of the obligor’s ADWE is to be withheld and send to the Child Support Enforcement Agency (CSEA) for child support, based on the following: 50% if the obligor is supporting another dependent not on one of the support orders mentioned above; 60% if there are no other dependents in the obligor’s home. So, in this example, the obligor does have other dependents. This means you’ll withhold 50% of the obligor’s ADWE, which is $200. (Before determining child support withholding, please contact the CSEA to obtain current and correct information, such as other dependents in the obligor’s home, whether the obligor has been ordered to pay arrears, and the amount of arrears.) 4.) To determine the amount to deduct and remit for each of the three child support cases in this example:

         a.) Divide the portion of ADWE being withheld for child support ($200.00) by the obligor’s total obligation of all cases ($431.00). 
 

$200.00 ÷ $431.00 = .46404


          b.) Multiply the answer (.46404 – and do not round off) by each     of the obligor’s obligations to determine what you should withhold and send to CSEA for each case.

 

$260.00 x .46404   = $120.65 for Case 1
$50.00 x .46404      = $23.20 for Case 2
$121.00 x .46404   = $56.15 for Case 3
Total $200.00

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