1. What is Disposable Earnings?

Disposable earnings are the amount of earnings left after legally required deductions are subtracted from gross earnings. This amount is used to determine wage garnishment limits under federal and state laws.

2. How Does the Calculator Work?

The calculator uses the disposable earnings formula:

Where:

• \( Gross\ Earnings \) — Total earnings before any deductions
• \( Required\ Deductions \) — Mandatory deductions required by law (taxes, Social Security, etc.)

Explanation: The equation calculates the amount available for potential garnishment after accounting for legally required withholdings.

3. Importance of Disposable Earnings Calculation

Details: Accurate disposable earnings calculation is crucial for determining the maximum amount that can be garnished from wages while ensuring the employee retains enough income to meet basic living expenses.

4. Using the Calculator

Tips: Enter gross earnings in dollars, required deductions in dollars. All values must be valid (non-negative numbers).

5. Frequently Asked Questions (FAQ)

Q1: What counts as required deductions?
A: Federal/state/local taxes, Social Security, Medicare, and other mandatory withholdings required by law.

Q2: How does disposable earnings affect garnishment?
A: Garnishment is typically limited to a percentage of disposable earnings (usually 25% or the amount by which disposable earnings exceed 30 times the federal minimum wage).

Q3: Are voluntary deductions included?
A: No, only legally required deductions are subtracted to calculate disposable earnings.

Q4: What's the difference between disposable and net pay?
A: Disposable earnings exclude only required deductions, while net pay typically includes both required and voluntary deductions.

Q5: Are there state-specific variations?
A: Yes, some states have different calculations or greater protections for disposable earnings.