Last updated: September 2026

Wage Garnishment Limits: The 25% Federal Cap and the Exceptions That Break It

Federal wage garnishment limits cap creditor orders at 25% of disposable earnings.

Below $217.50 a week, no ordinary creditor can touch a paycheck. That floor comes from multiplying the federal minimum wage of $7.25 by 30, a rule set in Title III of the Consumer Credit Protection Act.

The creditor cap does not cover child support orders or IRS tax levies. Identifying which regime owns the paycheck is the first step, because the cap, the exemption and the priority rule all differ by regime.

Federal Wage Garnishment Limits: The 25% Cap and the $217.50 Floor

The Title III garnishment framework sets two tests. Creditors take whichever protects more pay. An order withholds the lesser of 25% of disposable earnings, or the amount by which weekly disposable pay exceeds 30 times the federal minimum wage.

At today's $7.25 federal minimum wage, the weekly floor is $217.50. Biweekly, it doubles to $435. Semi-monthly it lands at $471.25. Monthly it sits at $942.50.

Below those numbers, ordinary creditor orders recover nothing.

Congress keyed that floor against federal minimum wage, which has held at $7.25 since July 2009.

A paycheck with $240 in weekly disposable pay owes just $22.50 to a creditor order, not the full $60 that 25% would suggest. That baseline rule favors low earners, but the benefit fades fast once weekly disposable pay clears $290.

Example: Joe earns $1,200 gross weekly, with $240 in mandatory deductions. Disposable earnings run $960. The 25% test gives a creditor $240. The floor test gives ($960 minus $217.50) $742.50. The lesser wins, so a creditor collects $240 that week.

Both tests have to be configured, not just the 25% one. A system that applies the percentage alone will take more than the floor allows on a small paycheck, because the floor test is the binding one there. Audit one pay cycle per order against a hand calculation rather than trusting the configuration.

How Disposable Earnings Get Calculated Before the Cap Applies

Disposable earnings are not take-home pay. The figure equals gross wages minus the deductions that law requires. Those deductions include federal income tax, state income tax, local income tax, Social Security and Medicare.

Health insurance premiums do not reduce that base. Neither do 401(k) contributions, union dues, garnishments already running under other orders, HSA contributions, or any voluntary payroll deduction.

An employee earning $1,000 gross with $200 in legally required deductions and $200 in benefit contributions has $800 in disposable pay, not $600. A 25% cap applies against that $800 figure, giving creditors up to $200 a week. Benefit contributions protect nothing from the order.

A garnishment already running does not reduce the disposable base for a second calculation. The base stays gross minus legally required deductions, and a prior order is not one of those. What a prior order consumes is the aggregate ceiling. Where 25% or more already goes to support and support has priority under state law, 29 CFR 870.11(b)(2)(iv) permits no additional ordinary garnishment at all.

If your payroll software treats voluntary deductions as if they reduced disposable pay, the base is wrong. That misconfiguration under-garnishes every creditor order.

The Stacking Mistake

A 25% cap covers the total of all creditor orders against an employee, not each order separately. A payroll team that receives a second creditor garnishment while the first is still active should not honor both at 25%. Withholding 50% from disposable pay violates federal law.

A concrete example makes the trap clear. Sarah earns $800 in weekly disposable pay. An existing creditor order takes $200 at 25%. A second creditor files a garnishment for a different debt. Payroll withholds another $200 and sends it along at that second creditor.

Sarah has now had 50% withheld, $200 more than federal law allows.

Ordering among creditor orders is set by state law and varies, so confirm your state's rule before you assume the sequence. What federal law fixes is the ceiling, not the sequence: 29 CFR 870.11(b)(2) leaves priority to state law or to another federal statute.

Child Support, IRS Levies, and Federal Loans Run in Separate Buckets

A child support order can claim 50% of disposable pay when an employee supports another family, or 60% when not. An extra 5% stacks on top in either case after 12 weeks of arrears. A hard ceiling lands at 55% or 65%, depending on facts.

Federal tax levies follow IRS Publication 1494. The Service sends Form 668-W to the payroll department, and withholding covers everything above the exempt amount for the employee's filing status and number of dependents. In the 2026 table the weekly floor is $309.62, for a single filer or married filing separately with no dependents, and each dependent adds $101.92.

Federal student loan administrative wage garnishment caps at 15% of disposable pay under 20 U.S.C. 1095a, and the Department of Education issues it. Check the status before you plan around it. On 16 January 2026 the Department announced it would delay implementation of involuntary collections on federal student loans, including administrative wage garnishment and the Treasury Offset Program, pending repayment reforms.

A worked example illustrates the stacking. Maria earns $1,200 gross with $300 in mandatory deductions, leaving $900 in disposable pay. A federal student loan AWG on its own would take 15%, or $135 a week. Add a $300 support order and it does not. 34 CFR 34.20(b) caps the AWG at the smaller of that ordinary amount or 25% of disposable pay less what the priority orders take. Here 25% of $900 is $225, minus the $300 support order, which leaves nothing. The AWG collects $0 that week, not $135.

State tax levies follow their own rules. The Title III creditor cap does not reach them at all, because 15 U.S.C. 1673(b)(1)(C) excepts any debt due for a state or federal tax, so look up the formula the state applies rather than assuming the 25% figure carries over.

The downside for employees caught in multiple regimes is obvious. A full support order plus an IRS wage levy can pull a paycheck down to the Publication 1494 floor.

Where State Law Takes Over From the Federal Cap

States can protect more of a paycheck than federal law requires. States cannot protect less. Employees always get whichever rule keeps more money in their bank account.

A state rule can bar the garnishment, use a different percentage, or run a different second prong. Work the rule for the state where the employee works, on that employee's actual disposable pay, rather than assuming the federal numbers apply.

State-level garnishment exemptions never help an earner below the federal floor, because federal protection is already stronger there. State rules raise that baseline, but the federal version anchors it nationwide.

A payroll system that defaults to the federal formula alone will under-protect employees in every state that sets a higher floor.

Commissions, Bonuses, and Final Paychecks All Count as Wages

Earnings under Title III include commissions and bonuses.

Separation does not end the obligation. Payroll cannot skip the last withholding because an employee is leaving.

Commissions paid on irregular schedules need a special calculation. Title III garnishment rules talk about earnings for any workweek, and when pay arrives less frequently than weekly, payroll converts to a weekly equivalent for the lesser-of test. A commission check covering eight weeks of work gets divided into eight weekly pieces, each tested against $217.50 and 25%.

Do not assume 1099 status puts income outside Title III. The statutory test is not W2 status. 15 USC 1672(a) defines earnings as compensation paid or payable for personal services, whether denominated as wages, salary, commission, bonus, or otherwise, and it expressly includes periodic pension and retirement payments. Compensation for personal services is the question, and whether a given contractor payment meets it is a question for the court that issued the order.

Responding to a Second Order Without Tripping the Cap

Pull the existing garnishment file before processing any new order.

Calculate disposable pay on the current pay period, then compare to the floor and cap.

Run whatever allocation your state requires, pro-rata or otherwise, and confirm which it is before the next payroll run rather than after.

The DOL Fact Sheet #30 is the authoritative federal summary of Title III garnishment rules, and the full statute lives in 15 U.S.C. 1673 at the Office of the Law Revision Counsel.

For the full picture of employer garnishment obligations, visit the main wage garnishment hub. For the playbook on receiving a new order, review the employer guide to wage garnishment obligations. Employees trying to reduce what an order takes should read how to stop wage garnishment, especially the exemption and hardship sections. For the specific rules on support orders and federal tax collection, see child support garnishment and IRS wage levy. Multi-state employers running garnishments across jurisdictions will also want to check the payroll tax hub for state-specific compliance.

This is not legal or financial advice. Consult a qualified professional for your specific situation.