Defining Canada garnishment rules

Garnishment rules determine how Payroll calculates:

The portion of employee pay that is exempt from garnishments
How Payroll calculates fees
How Payroll calculates multiple garnishments

Before you define Canada garnishment rules, you must define any of the garnishment types you need that are not part of the standard delivery. If the garnishment rules include fees, you must define a garnishment deduction code for the fee. Related reports and inquiries

Define Canada garnishment rules

Access Canada Garnishment Rules (PR46.2).
Define garnishment rule components. Specify this information:

Governing Tax Authority

The tax authority (province, or other locality) governing the garnishment. The tax authority determines the rules that apply to a type of garnishment.

Category

The category of the garnishment. If you set up rules for a garnishment category, the rules apply to all types associated with the category unless a rule is defined for a specific category and a specific type.

Federal rules are defined by category.

Type

The type of garnishment.

Formula

The formula that the system uses to calculate exempt wages.

Multiple Garnishment Rule

The value that indicates how Payroll should distribute the amount withheld when the amount is insufficient to cover multiple garnishment orders for the same category.

Note: If a garnishment has more than one variable rule, you must enter all the pertinent information for each variable on separate lines.
Define exempt wage factors according to the requirements of the governing tax authority and formula. Specify this information:
Mar Stat (Marital Status)

The marital status that you want to define formula details for.

Basic Exempt

Type the amount or percent of wages that are exempt from garnishments each month.

Basic Calc

The selection you make in this field defines the value in the Basic Exempt field as an amount or percent.

Wages Levels

The monthly wage level at which employees are eligible for an additional exemption. This exemption is in addition to the basic exemption.

Additional Exempt

The amount or percent of additional wages that are exempt from garnishments each month.

Addl Calc

The selection you make in this field defines the value in the Additional Exempt field as an amount or percent.

Minimum Exempt

The minimum amount or percent of wages that are exempt from garnishments each month.

Min Calc

The selection you make in this field defines the value in the Minimum Exempt field as an amount or a percent.

Min Dep (Minimum Dependent)
The number of dependents that correspond to the formula details on this line.

Note: The number you type in this field can be the beginning of a range of dependents. For example, if you type 2 on this line and type 4 on the next line, employees with:
- 0 or 1 dependent would have no formula details defined for them.
- 2 or 3 dependents would use the formula details defined on this line.
4 or more dependents would use the formula details defined on the next line.
Maximum Exempt

The maximum amount or percent of wages that are exempt from garnishments each month.

Max Calc

The selection you make in this field defines the value in the Maximum Exempt field as an amount or percent.
Repeat step 3 for each set of exempt wage factors needed to meet the requirements of the governing tax authority and formula.
Define exempt wages per dependent on the Dependent Detail tab. Specify this information:
Number of Dependents
The number of dependents you want to use to calculate the wage amount that is exempt from garnishment seizure.

Note: If you leave this field blank and type in an amount in the Amount field, Payroll applies the amount to each dependent defined for an employee on the Family tab of Canada Employee Garnishment (PR47.1).

Note: The number you type in this field can be the beginning of a range of dependents. For example, if you type 2 on this line and type 4 on the next line, employees with:
- 0 or 1 dependent defined on PR47.1 would have no formula details defined for them.
- 2 or 3 dependents defined on PR47.1 would use the formula details defined on this line.
- 4 or more dependents defined on PR47.1 would use the formula details defined on the next line.
Amount

The monthly amount you want to use to calculate exempt wages. This amount is associated with the number of dependents you type in the Dependent field.
Define pay and deductions Payroll uses to determine net wages on the Net Wages tab.

Note: The Employer Fees tab does not define court-ordered fees. To apply court- ordered fees to an employee garnishment, use the Court Fee field on Canada Employee Garnishment (PR47.1).
Define any fees included in the garnishment on the Employer Fees tab. Specify this information:

Deduction

Select a deduction code to use to track fee amounts withheld separately from the garnishment amount. You can only use deduction codes that have Yes in the Garnishment field on Deduction (PR05.1).

Note: Once you add this rule, the fee deduction cannot be changed. To change a fee deduction for an existing rule, you must delete the rule and then add it with a new deduction code.

Amount

Type the amount to be deducted from the employee's earnings for this garnishment fee. If this field and the Amount field are left blank, the Limit Option along with Limit Amount 1 and Limit Amount 2, if applicable, determine the amount to be withheld.

Note: If this amount is changed, Deduction and Garn Fee Update (PR115) updates employee deduction master records with the new amount (unless the amount was overridden at the employee level).

Apply Fee

Select if you want to apply the fee only when the garnishment amount is actually withheld or apply the fee every payroll cycle in which the garnishment amount should be withheld (regardless of whether funds exist to cover the garnishment order plus fees).

Limit Option

Select which limit option should be used to determine the fee amount. Use this field in combination with the Limit Amount 1 field and, if applicable, the Limit Amount 2 field.

Limit Amount 1

Type a limit amount or percentage to be used in fees calculation (based on the value in the Limit Option field).

Limit Amount 2

If the Limit Option rule has two calculations, type the second limit amount or percentage to be used in fees calculation.

Accrual Amount

Select the distribution company for the accrual account on the fees deduction.