Last updated: April 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 Consumer Credit Protection Act here is a federal debt-collection statute at 15 USC 1673, not California's privacy law of the same acronym. These CCPA wage rules are a separate federal regime.

The creditor cap does not cover child support orders, IRS tax levies, or federal student loan administrative attachments. Each of those sits outside the creditor cap and follows its own garnishment priority order. Employees looking up how to reduce an order usually need to identify which regime owns the paycheck first.

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.

Earners with disposable pay just over the floor keep more than 25% because the lesser-of test wins. 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.

Total creditor orders share that 25%. Two creditor garnishments on one paycheck split the slice; they do not each get their own 25% allowance. In most states, the earlier-dated order collects first and the second order sits in line until the first is satisfied. A minority of states use pro-rata sharing, but that is the exception here, not the default.

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.

Math favors employers who configure both tests correctly in payroll software. Most modern systems apply both tests automatically when a Title III garnishment flag is enabled on each order. Older configurations run the 25% test alone, under-withhold small paychecks, and still take more than the floor allows. Audit one pay cycle per order at least twice a year.

Why the drafters chose 30 is worth knowing. Congress wanted a floor tied to subsistence wages, and in 1968 a 30-hour week at the minimum wage was the working definition of that baseline. Congress keyed that floor against federal minimum wage, which has held at $7.25 since July 2009.

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, Medicare, mandatory state disability like California SDI, and state unemployment where an employee bears it.

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. A creditor base stays broad on purpose.

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.

One creditor deduction already running does reduce the disposable base for a second calculation, but only in a narrow sense. If a child support garnishment takes $250 first, a second order's 25% cap applies to what remains. In most cases room is already gone, since a family support order alone can reach 65%.

The exception worth flagging: some payroll software treats voluntary deductions as if they reduced disposable pay. That misconfiguration under-garnishes every creditor order, and the shortfall becomes an employer debt owed back at that creditor. Run a manual calculation on one live order and compare to what the system produced.

A tradeoff baked into federal design: broader base, larger creditor slice, fewer dollars protected for voluntary savings. Employees pushing retirement contributions higher do not shrink what a creditor can take.

The Stacking Mistake That Makes Employers Personally Liable

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.

Over-garnish an employee and the excess becomes your debt.

The catch: honoring two creditor orders at 25% each exposes the company to repaying the over-withheld portion as an employer debt, plus damages a court may award on top. The right response to a second creditor order is a written answer. Tell the sheriff or court that the employee is already at maximum under Title III garnishment, and state that this order will run when the prior is satisfied. Keep a copy in the payroll file with the existing order.

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. Her employer owes her that $200 plus any damages a court awards.

First-in-time rules apply in most states. An earlier-dated creditor order takes the 25% until paid off. The second sits in line. The exception to first-in-time: states like Illinois, Missouri, and Ohio use pro-rata sharing on creditor orders filed before either is satisfied.

Confusing the creditor cap with the support-order rule is the single most common error payroll clerks make on multi-order paychecks. A child support garnishment and an IRS wage levy sit in separate buckets with their own ceilings and garnishment priority rules. A support order running at 50% does not close the creditor bucket. It shrinks the disposable base a creditor cap then applies to.

Employer garnishment obligations run in both directions. Payroll misses on the shortfall side mean the company owes a creditor for what should have been withheld. Payroll misses on the over-withholding side mean the company owes the employee for the excess. Risk runs in both directions, and it lands on the team that processes the check.

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

Three federal regimes sit outside the 25% creditor cap entirely.

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 a small exempt amount. That exempt amount usually runs between $220 and $450 a week depending on filing status and dependents. The Service skips the court system entirely, which is a meaningful limitation on due-process defenses at the front end.

Federal student loan administrative attachment caps at 15% of disposable earnings under the Higher Education Act. The Department of Education issues these without a court judgment, but the borrower can request a hearing to dispute.

A child support garnishment reduces the disposable base before any creditor cap is applied. That means a 50% support withholding leaves 50% of disposable pay on the paycheck, and a creditor 25% test applies to the remainder. In practice, creditor orders collect nothing while a full support order runs.

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 would take 15%, or $135 a week. Add a $300 support order running first, and the AWG still comes out of the $900 base. Loan servicers calculate against disposable earnings, not the remaining-after-other-orders figure.

State tax levies follow their own rules. Most align loosely with the federal framework, but California, New York, and Illinois run state-specific formulas that sometimes take more than a comparable federal cap would allow.

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. A federal student loan AWG on top then vanishes because no room is left. The math stops mattering once three orders stack.

State Overlays That Shrink the Creditor Slice Further

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.

State rules cut deeper, never shallower.

Texas bans creditor garnishment for most earned wages. Only child support, tax levies, federal student loans, and court-ordered alimony reach a Texas paycheck. A credit card company holding a Texas judgment cannot touch wages at all, but bank account levies work differently.

Pennsylvania and South Carolina take similar positions. Creditor garnishment stops at the door. Family support, back taxes, and landlord judgments for rent can still reach wages, but nothing else can.

California runs the 25% test against 40 times the state minimum wage instead of 30x federal minimum. At $16 an hour for 2026, the California floor sits at $640 a week, almost triple what federal law sets. California employees keep more of every paycheck that falls below $853 weekly disposable pay.

New York caps creditor garnishments at 10% of gross or 25% of disposable pay, whichever is less. Florida exempts head-of-household earners entirely below $750 a week of disposable pay, unless the earner has signed a written waiver. Massachusetts sets enhanced protection tied to a state minimum wage multiple. New Jersey applies a sliding scale below 250% of the federal poverty line.

These state overlays create meaningful garnishment exemptions for employees in specific states. The exception worth knowing: 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.

Rule of thumb: if federal and state numbers disagree, the employee gets whichever version leaves more take-home pay. Payroll systems that default to federal alone under-protect employees in California, New York, Florida, and Massachusetts. Check the state flag in the wage attachment module before processing any creditor order.

Commissions, Bonuses, and Final Paychecks All Count as Wages

Earnings under Title III include commissions, bonuses, PTO payouts, severance, and tips where the tips are legally the employee's wages. A final paycheck falls under creditor garnishment in full, but only the disposable portion faces the 25% cap.

That catches employers off guard at separation. A $10,000 final check that includes accrued vacation and a prorated bonus stays subject to any order running against the employee until the court confirms termination. 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%.

Tips get complicated. In states where tips are legally the employee's property and never pool into wages for minimum wage purposes, they may sit outside CCPA earnings. In tip credit states where an employer takes a tip credit against minimum wage, the tips count as wages and face the cap. Check state law before excluding tip income, because misclassifying it creates employer liability in either direction.

Severance packages negotiated at separation fall inside CCPA earnings too. An employee signing a severance agreement after a creditor order is active should expect the full 25% to hit each scheduled payment. The same floor test runs on each tranche. Drafting severance as a lump sum paid in one check does not evade the order; it just moves the entire 25% into one line.

The exception: independent contractor 1099 income falls outside CCPA protection entirely, because Title III covers wages, not contractor earnings. These garnishment exemptions for 1099 income do not extend to federal tax levies, which reach any payer. Employees converted to 1099 status to dodge an order face a separate worker misclassification claim.

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. File a written answer to the new order stating the employee is already at the Title III garnishment maximum, and attach copies of the prior orders. Send that answer through certified mail inside the state deadline, usually 7 to 30 days.

Run a pro-rata calculation if the employee lives in a state that requires it. Otherwise continue the first-in-time order until it clears.

Employers handling multiple orders per pay cycle should call the payroll provider and ask about the wage attachment module. Most modern platforms apply both tests automatically when orders are loaded with the right priority codes, but the codes have to be set on day one.

Employer garnishment obligations on multi-order paychecks are the single biggest source of personal liability exposure. Check the flag. Check the stacking. Check garnishment priority against the order date on file, not the date the document arrived in the mail.

The DOL Fact Sheet #30 is the authoritative federal summary of Title III garnishment rules, and the full statute lives in eCFR Title 15, Chapter 41, Subchapter II.

For the full picture of employer garnishment obligations, visit our main wage garnishment hub. For the playbook on receiving a new order, review our 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.