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Indiana Garnishment Formula:
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Wage garnishment in Indiana is a legal process where a portion of an employee's earnings is withheld by their employer for the payment of a debt. Indiana follows federal law (Consumer Credit Protection Act) which limits garnishment to the lesser of 25% of disposable earnings or the amount by which disposable earnings exceed 30 times the federal minimum wage.
The calculator uses the Indiana garnishment formula:
Where:
Explanation: The garnishment cannot exceed 25% of disposable income and must leave the employee with at least the exempt amount.
Details: Proper garnishment calculation ensures compliance with Indiana and federal laws, protects employee rights, and helps employers avoid legal penalties.
Tips: Enter disposable earnings (after taxes and other required deductions) and the current Indiana exemption amount. The calculator will determine the maximum garnishable amount.
Q1: What counts as disposable earnings?
A: Disposable earnings are what remain after legally required deductions (federal/state taxes, Social Security, etc.), but not voluntary deductions.
Q2: What is the current Indiana exemption amount?
A: As of 2023, it's $217.50 per week (30 × $7.25 federal minimum wage). This changes if minimum wage changes.
Q3: Are there different rules for child support?
A: Yes, child support garnishments can take up to 50-65% of disposable income depending on circumstances.
Q4: Can multiple garnishments occur simultaneously?
A: Generally, total garnishments cannot exceed 25% of disposable earnings, except for certain priority debts like child support or taxes.
Q5: How often should garnishment amounts be recalculated?
A: Whenever the employee's pay rate changes or when the federal minimum wage changes the exemption amount.