What Are Disposable Earnings and Wage Garnishment Limits?

Disposable earnings and wage garnishment limits work off a single number that is not the same as your take-home pay. Your disposable earnings are what remains after your employer subtracts only the deductions the law requires — federal and state income taxes, Social Security, Medicare, and similar mandatory withholdings. Voluntary deductions you chose, like health insurance premiums, 401(k) contributions, and union dues, stay in the figure. Federal law then caps how much of that disposable amount a creditor can garnish, and the cap depends on what kind of debt it is: 25% for ordinary consumer debts, up to 65% for child support, no percentage ceiling at all for IRS levies, and 15% for defaulted federal student loans.

How to Calculate Your Disposable Earnings

Under the Consumer Credit Protection Act, disposable earnings equal your gross earnings minus the deductions your employer is legally required to withhold.¹ The word “required” draws a hard line between what the government forces your employer to take and what you asked your employer to take.

Legally required deductions include federal income tax, state and local income taxes where applicable, your share of Social Security and Medicare, state unemployment insurance contributions where state law requires them, and state-mandated public retirement contributions.

Everything else stays in. Health insurance premiums, 401(k) and other voluntary retirement contributions, life insurance, charitable giving, and union dues do not reduce disposable earnings, even though they reduce the deposit that lands in your bank account.² The retirement point trips people up most. Unless your state requires contributions to a public pension system by law, your retirement savings count as voluntary, and the garnishment calculation treats them as if they never came out. Someone contributing 10% to a 401(k) will see a garnishment order bite into money they have already mentally allocated elsewhere.

What Counts as Earnings in the First Place

Before the calculation runs, the law has to recognize your pay as earnings. The CCPA defines earnings as compensation paid for personal services: wages, salary, commissions, bonuses, and periodic pension or retirement payments.¹ Disability payments from an employer-sponsored plan also qualify.²

Tips carry a quirk. The cash wages your employer pays directly and any tip credit your employer claims count as earnings. Tips you receive above that amount do not.² A server making $2.13 per hour in direct wages plus a $5.12 tip credit has earnings based on $7.25, not on whatever a busy shift actually produced.

Independent contractor payments fall outside the CCPA entirely. The statute reaches employer-to-employee compensation. A creditor pursuing a 1099 contractor’s income typically goes through a bank account levy instead of a wage garnishment order.

Bonuses, commissions, severance, and back-pay settlements are earnings on the same test: were they paid in exchange for your personal services? If yes, the garnishment math applies. A year-end bonus gets no special treatment; your employer calculates disposable earnings on it and withholds accordingly. Payments unrelated to services performed — such as reimbursements for educational expenses under IRS Code Section 127 — are not earnings and sit outside the limits.²

Federal Garnishment Limits for Consumer Debts

For credit cards, medical bills, personal loans, and other ordinary consumer debts, the CCPA caps garnishment at the lesser of two amounts: 25% of disposable earnings for the pay period, or the amount by which disposable earnings exceed 30 times the federal minimum wage.³ The federal minimum wage remains $7.25 per hour, which puts the weekly protected floor at $217.50.⁴ Whichever calculation produces the smaller garnishment is what applies.

A Worked Example

Suppose your weekly disposable earnings are $300. The 25% test gives $75. The excess-over-floor test gives $82.50 ($300 minus $217.50). The employer garnishes $75, the smaller number.

Now suppose disposable earnings are $250. The 25% test gives $62.50; the excess test gives $32.50. The employer garnishes $32.50. The floor test protects more income at lower earnings levels.

If weekly disposable earnings sit at $217.50 or below, the excess test produces zero. Nothing can be garnished, regardless of what 25% would equal.

Non-Weekly Pay Periods

Most people are not paid weekly. The Department of Labor publishes equivalent protected floors: $435.00 for biweekly pay, $471.25 for semimonthly, and $942.50 for monthly.² Disposable earnings at or below those figures mean no garnishment. Above them, your employer withholds either 25% or the amount above the floor, whichever is smaller.

Higher Limits for Child Support and Alimony

Support orders work differently. The 30-times-minimum-wage floor does not apply, and the percentage caps are much higher.³ The ceiling depends on whether you are supporting another spouse or dependent child, and whether you are behind:

50% of disposable earnings if you are supporting a second spouse or dependent child
60% if you are not supporting anyone else
55% if supporting a second family and 12 or more weeks in arrears
65% if not supporting a second family and 12 or more weeks in arrears

Arrears are measured from the beginning of the current workweek, looking back 12 weeks. At 65%, a person with $1,000 in weekly disposable income loses $650 to a single support garnishment.

IRS Tax Levies Have No Percentage Cap

Federal tax levies are exempt from the CCPA limits altogether.³ Instead of a percentage, the IRS protects a flat exempt amount based on your filing status, dependents, and standard deduction. Your employer calculates it using IRS Publication 1494, which arrives with the levy notice on Form 668-W.⁵

For 2026, a single person paid weekly has $309.62 exempt, plus $101.92 for each dependent. A married couple filing jointly, paid biweekly, with two dependents, has $1,646.16 exempt. An additional $78.85 per week is exempt if you are 65 or older or blind, as indicated on Parts 3, 4, and 5 of the levy form.⁶

Everything above the exempt amount goes to the IRS. If your exempt figure is $310 and your weekly disposable earnings are $1,500, the IRS takes $1,190 — nearly 80% of the paycheck. There is no percentage ceiling to fall back on.

Defaulted Federal Student Loans

Defaulted federal student loans use a separate framework under the Higher Education Act. The Department of Education or a guaranty agency can garnish up to 15% of your disposable pay without going to court, through administrative wage garnishment. The percentage is lower than the 25% consumer cap, but the agency skips the step of obtaining a judgment. You get 30 days’ notice, during which you can inspect the records, propose a voluntary repayment plan, or request a hearing on whether the debt exists or the amount is correct.⁷ Miss that window and the garnishment starts.

When More Than One Order Hits at Once

Multiple garnishment orders cannot push the total withheld past the applicable limits, but priority among creditors matters. Child support orders generally go first. If support is already consuming 50% of disposable earnings, a consumer creditor’s order may collect nothing, because the combined withholding cannot exceed the legal ceiling.

For federal student loan garnishments specifically, when a prior order is already in place, the Department of Education can take only the lesser of 15% or 25% of disposable pay minus whatever is already being withheld.⁸ A family support order that arrives at any point takes priority even over an existing student loan garnishment.⁹ In practice, employees facing multiple debts rarely see garnishments stacked to each creditor’s full individual limit. The employer runs orders in priority sequence, and lower-priority creditors wait.

Can Your Employer Fire You Over a Garnishment

Federal law prohibits firing an employee because wages are being garnished for any one debt. A willful violation carries a fine of up to $1,000, up to a year in prison, or both.¹⁰ The Department of Labor’s Wage and Hour Division enforces the rule.² The protection is narrow. It covers one indebtedness. Once a second creditor’s order arrives, federal law no longer shields the job. Some states extend broader protection; the federal floor does not.

How State Law Can Change the Answer

State garnishment laws must meet the federal floor and may go further. Where state and federal rules conflict, your employer applies the one that produces the smaller garnishment.²

Four states effectively bar wage garnishment for consumer debts: Texas, Pennsylvania, North Carolina, and South Carolina. Creditors holding judgments on credit cards, medical bills, or personal loans in those states cannot touch a paycheck, though they can still levy bank accounts. The ban does not reach child support, alimony, federal tax debts, or federal student loans, which can be garnished in every state.

Other states tighten the formula in different ways. Some substitute their own higher minimum wage for the federal $7.25 when calculating the protected floor. Some apply a multiplier greater than 30. Some cap garnishment below 25%. Two employees with identical salaries can see very different withholdings depending on where they work. If an order has already landed or looks likely to, checking your state’s specific rules is the single most useful step; the federal numbers above are the minimum protection, not necessarily the full extent of it.

1
Office of the Law Revision Counsel. 15 U.S. Code 1672 – Definitions
2
U.S. Department of Labor. Fact Sheet 30 – Wage Garnishment Protections of the Consumer Credit Protection Act
3
Office of the Law Revision Counsel. 15 U.S. Code 1673 – Restriction on Garnishment
4
U.S. Department of Labor. Minimum Wage
5
Internal Revenue Service. What if I Get a Levy Against One of My Employees, Vendors, Customers or Other Third Parties
6
Internal Revenue Service. Publication 1494 – Tables for Figuring Amount Exempt from Levy on Wages, Salary, and Other Income
7
Office of the Law Revision Counsel. 20 U.S. Code 1095a – Wage Garnishment Requirement
8
eCFR. 34 CFR Part 34 – Administrative Wage Garnishment
9
eCFR. 34 CFR 34.20 – Amount To Be Withheld Under Multiple Garnishment Orders
10
Office of the Law Revision Counsel. 15 U.S. Code 1674 – Restriction on Discharge From Employment by Reason of Garnishment