Why Add a User-Defined Deduction?

User Defined Deductions are entered for child support and garnishments when StaffSuite's normal method of handling such deductions is not adequate for the formula required by the taxing authority or the courts.

In order to determine whether you need to enter a user-defined deduction, it is important to understand how StaffSuite calculates garnishments and child support. These formulas are typical of the majority of garnishments and child support arrangements.

Calculating Garnishments

Determine Disposable Income: Deductible Gross = Deductible Gross - (federal taxes + state taxes + local taxes) + EIC

Determine Exempt Wages (e.g., the amount not subject to the garnishment): Exempt Wages = Minimum Wage Multiplier * Federal Minimum Wage

Determine Available Gross: Available Gross = Deductible Gross - Exempt Wages

Determine Deduction Amount (Percentage Amount): Deduction Amount = Deductible Gross * Garnishment Percentage Rate

If Exempt Wages is greater than or equal to the Deductible Gross, then the Deduction Amount is 0.00.

If Available Gross is less than the Deduction Amount, then the Deduction Amount is 0.00.

Calculating Child Support

Determine Disposable Income:

Disposable Income = (Taxable Gross - (federal taxes + state taxes + local taxes))

Deductible Gross = Disposable Income * Deduction Maximum Percentage

Determine Deduction Amount for Fixed Dollar deductions

If there is no deduction amount defined, then Deduction Amount = Deductible Gross

If there is a deduction amount defined, then Deduction Amount = The lesser of Deduction Amount and Deductible Gross

Determine Deduction Amount for Percentage Deductions

Deduction Amount = Rounded (Deductible Gross * Deduction Percentage)

Examples of User-Defined Deductions

Garnishment Example

You want to set up a garnishment that takes the lesser of:

• 25% of Gross Earnings minus Withholding

• (Gross Earnings minus Withholding) minus (30 times the Federal Minimum Wage)

In this example:

• Line 1 determines All Disposable Earnings by subtracting All Withholdings from Gross Earnings.

• Line 2 determines 25% of Disposable Earnings by multiplying the results from line 1 by .25.

• Line 3 calculates Thirty Times Fed Min Wage by multiplying 4.25 by 30 (note: 4.25 reflected the Federal Min Wage at the time this formula was created).

• Line 4 determines Adjusted Disposable Earnings by subtracting the results of line 3 from the results of line 1.

• Line 5 determines the Actual Deduction Amount by taking the lesser amount of lines 2 and 4.

Child Support Example

You want to set up a child support deduction that takes the lesser of:

• 20% of Gross Earnings

• Half of Disposable earnings (Gross Earnings minus Withholdings)

In this example:

• Line 1 determines the Likely Deduction Amount by multiplying Gross Earnings by .20.

• Line 2 determines Disposable Earnings subtracting Withholdings from Gross Earnings

• Line 3 calculates the Maximum Deduction Dollar (Deduction Max $) amount by multiplying the results of line 2 by .50.

• Line 4 determines the Actual Deduction Amount by taking the lesser amount of lines 1 and 3.

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