How to set up wage garnishment in QuickBooks

At some point, companies usually face wage garnishment issues for child support, federal and state tax levies, credit garnishments and garnishments for student loans. By tracking such garnishments in QuickBooks is vital so it is suggested you keep your financial records accurate and precise.

Know what is wage garnishment in QuickBooks?

A wage garnishment is an order for an employer to withdraw salaries from an employee’s pay and to give the money to an entity or creditor through a judge, the federal government or a state department. Also, the order could require you to apply an administrative fee to the employee.

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There are certain terms used for a garnishment order include federal tax levy, bankruptcy orders, earnings withholding, writ of garnishment, support order or garnishment summons.

What are the wage garnishment types in QuickBooks?

The different types of wage garnishment are listed below:

  1. Federal and state tax levies
  2. Child or spousal support withholding orders
  3. Bankruptcy
  4. Federal and state student loans
  5. Federal agency debt orders (non-tax)
  6. Creditor garnishments.

Steps to set up wages garnishment in QuickBooks

The below-mentioned consists of multiple steps processes and that are easy to set up wage garnishment.

  1. The very first, set up an Other Current Liability account to record the amount of the employee’s salary that is withheld
  • Open lists and then click on Charts of Accounts
  • Next, right-click on it and select add New
  • Select Other Current Liability for the account type
  • Save it with a name of Wage Garnishments Payable
  • Tick the box named “subaccount of” and make this sub-account for the Payroll Liabilities account.
  1. After that generate payroll item that displays on paychecks
  • Initially, click on Employees then Manage Payroll Items and then New Payroll Item
  • After that select and click on “Custom Setup”
  • Then click on “Deduction” in the next appeared window
  • Name that deduction, for example, child support, federal and state tax levies, etc
  • Then type the name of the company or agency to whom you have to pay garnishment
  • If required, enter the account number
  • After that select and click on the account named “Wage Garnishment Payable” that you had set up as your account
  • Select None in the next appeared screen as “tax tracking type”
  • Make sure it should not check anything within the “taxes” window
  • Then select neither on the “calculate based on quantity” screen
  • Gross pay should be checked in the open window of “gross vs. net”
  • Any default rate is acceptable in the window of “default rate and limit”; in case of one employee for that particular item
  • In case, you have multiple then leave that option as blank
  • At last, click on the Finish option.
  1. Next, set up a schedule for liability payment
  • Select employees then payroll taxes and liabilities then Edit Payroll dues dates and then click on Methods
  • Then it open payroll set up window and click continue
  • Again, click continue for edit or add scheduled
  • Then, you can see wage garnishment name such as “Child Support” or other for that you do set up before
  • After that, click on Edit option
  • On the next appeared window, choose the payment frequency
  • In the end, click on the Finish button and then again hit the finish in order to close the payroll setup window.
  1. At last, add the employee subject to garnishment with the payroll item:
  • Open Employee Center from home screen or icon bar
  • Choose employee and then right-click to select Edit option
  • Edit the view with “Employee and compensation Info”
  • Then choose garnishment item within the deduction section
  • Enter the amount to deduct with the amount section
  • Finally, click the Ok button.

How to get in touch?

Hopefully, you find the above-mentioned steps easy and appropriate to set up wage garnishment in QuickBooks. In any case, if you face difficulty or getting stuck with the steps, feel free to get in touch with QuickBooks technical support toll-free help-desk number. They are available all round the clock and more than happy to assist and provide the best relevant solution for your queries or issues. You can also connect with them via dropping an email or do a live chat with dedicated experts.

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