What are “disposable earnings?”

The amount of pay subject to garnishment is based on an employee’s “disposable earnings,” which is the amount left after legally required deductions are made. Examples of such deductions are federal, state, and local taxes. It also includes withholdings for employee retirement systems required by law. Deductions not required by law — such as those for union dues, health and life insurance, contributions to charitable causes, purchases of savings bonds, retirement plan contributions (except those required by law), and payments to employers for payroll advances or purchases of merchandise — usually may not be subtracted from gross earnings when calculating disposable earnings. The gross earnings generally include all forms of compensation for services, such as wages, salary, commissions, and bonus payments.