A garnishment fee is the administrative charge your employer or bank keeps for the work of processing a court-ordered garnishment against your wages or bank account. For a wage garnishment, expect a small recurring deduction, often a few dollars per pay period. For a bank account levy, expect a one-time charge in the range of $75 to $150. The money goes to the party doing the processing, not to your creditor, so it doesn’t reduce what you owe.
What the Fee Pays For
When a court orders a third party to redirect your money to a creditor, that party (legally called the “garnishee”) has real work to do. A payroll department has to recalculate your net pay each period, comply with the withholding order, and send funds to the right place. A bank has to verify account ownership, check for legal exemptions, freeze the correct amount, and process the transfer. The fee reimburses the garnishee for that work.
It does not shrink your debt. It is not credited against the judgment balance or the interest running on it. If your employer withholds $200 for a creditor plus a $3 processing fee, you still owe the creditor the full balance minus $200. The $3 disappears into your employer’s operating costs. Over months or years, those small charges add up to real money that benefits neither you nor the creditor.
How Much Employers Charge on a Paycheck
Most states let employers charge a small per-payment fee for handling a wage garnishment. The amounts vary. Some states cap the fee at $1 per payment, others allow up to $12 per month, and a handful prohibit the charge entirely. There is no single federal cap, so your state’s law controls what your employer can take.
The charge comes out of your paycheck alongside the garnishment itself. Because wage garnishments often run for months or years, even a modest per-period fee compounds. At $3 per biweekly paycheck, that’s roughly $78 over a year, none of which reduces your outstanding balance.
How Much Banks Charge on a Levy
Bank account levies work differently. When a creditor obtains a court order to seize funds from your account, the bank charges a one-time processing fee rather than a recurring one. These fees tend to run larger than employer fees, typically between $75 and $150, depending on the bank’s own schedule.
Bank levy fees are also less consistently regulated than employer fees. The bank takes its fee directly from your account balance the moment it processes the freeze order, before sending the remaining frozen funds toward your debt. That immediate deduction can push a tight account into overdraft, adding more charges on top of the levy. Checking your account immediately after receiving notice of a levy can help you flag problems before additional fees pile up.
Does the Fee Come on Top of the 25% Wage Cap?
No. This is the part that catches people off guard. The Consumer Credit Protection Act limits garnishment for ordinary consumer debt to the lesser of 25% of your disposable earnings or the amount by which your weekly disposable earnings exceed 30 times the federal minimum wage of $7.25, which sets a floor of $217.50 per week. 1Office of the Law Revision Counsel. 15 USC 1673 – Restriction on Garnishment
“Disposable earnings” is not take-home pay. It’s gross compensation minus only what the law requires be withheld: federal and state income tax, Social Security, and Medicare. 2GovInfo. 15 USC 1672 – Definitions Voluntary deductions like 401(k) contributions, health insurance, and union dues don’t reduce the number the 25% is calculated against.
The Department of Labor treats an employer’s processing fee as part of the total amount subject to the garnishment limit, not as a separate deduction on top of it. 3U.S. Department of Labor. Field Operations Handbook Chapter 16 – Wage Garnishment Protections So if 25% of your disposable earnings is $300 and the employer’s fee is $5, the creditor receives $295. The fee reduces the creditor’s share rather than the amount coming out of your check. For federal employees, this rule is spelled out in regulation: the maximum withholding, “including any amounts withheld to offset administrative costs,” cannot exceed 25% of aggregate disposable earnings. 4eCFR. 5 CFR Part 582 Subpart D – Consumer Credit Protection Act Restrictions
Child Support and Tax Garnishments
Child support and tax debts follow different limits. For child support, the ceiling rises to 50% of disposable earnings if you are supporting another spouse or dependent child, or 60% if you are not. Each of those goes up 5 percentage points if you’re more than 12 weeks behind, reaching a maximum of 65%. 1Office of the Law Revision Counsel. 15 USC 1673 – Restriction on Garnishment Federal and state tax debts are exempt from the CCPA cap entirely, so the IRS can take more than 25%.
Most states also allow employers to charge a separate administrative fee for processing a child support withholding order, set by the law of the state where you primarily work. 5Administration for Children and Families. Income Withholding – Answers to Employers Questions Across the country these fees usually run from $1 to $10 per payment, with a few states allowing a larger charge on the first payment and a few prohibiting the fee. 6Office of Child Support Enforcement. State Income Withholding Information
Protected Deposits and What the Bank Can Charge Against Them
Certain federal benefits carry legal protection against most garnishment orders, and that protection follows the money into your bank account. Social Security, Supplemental Security Income, VA benefits, and federal retirement payments are shielded from ordinary consumer-debt garnishment.
When a garnishment order hits your account, federal regulation requires the bank to automatically protect deposits of federal benefits going back two months. The bank must calculate what came in during that lookback period and keep it accessible to you, with no court motion or exemption claim required. 7eCFR. 31 CFR Part 212 – Garnishment of Accounts Containing Federal Benefit Payments The bank also cannot pull its processing fee out of the protected amount. Its fee has to come from non-protected funds. If the account contains only federal benefit deposits, the bank may still charge the fee but cannot take it from those protected dollars.
Challenging a Fee That Looks Too High
If your employer or bank charges more than your state allows, you have recourse. The Department of Labor’s Wage and Hour Division enforces the CCPA’s limits on how much can be taken from your pay. 8U.S. Department of Labor. Fact Sheet 30 – Wage Garnishment Protections of the CCPA For questions about the specific fee amount, which is governed by state law rather than federal, the DOL directs you to the court or agency that issued the order.
The usual path is filing a claim of exemption or objection with the court that issued the writ. That asks the judge to review the deductions and decide whether they comply with the applicable limits. A court can modify or terminate a garnishment that violates the law, and a garnishee that has been charging above the statutory maximum can be ordered to refund the difference. You don’t need a lawyer to file this kind of motion, though the procedure varies by jurisdiction.
For bank levy fees, options are narrower because fewer states set firm statutory caps on what banks can charge. Start by asking the bank for a breakdown of the fee and comparing it against your state’s rules. If it exceeds what the law allows, raising the issue with the court that authorized the levy is the next step.