How do I create a child support order or other wage garnishment?

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Setting up a new wage garnishment for QuickBooks payroll is a multiple step process. Watch the video to see these steps in action.

First, set up an Other Current Liability type account to record the amount withheld from employee’s pay:

Go to Lists >Chart of Accounts
Right click and choose to add New
Choose Other Current Liability as the account type
Name it Wage Garnishments Payable
Check the “subaccount of” box and make it a sub-account of your Payroll Liabilities account

Note: QB does not come with the Payroll Liabilities separated into their own sub-accounts. I suggest you set up one for each payroll liability.

Next, create the payroll item that will appear on paychecks:

Go to Employees > Manage Payroll Items > New Payroll Item
Select Custom Setup on the next screen
Select Deduction on the next screen
Name the deduction, Child Support for example, on the next screen
Enter the name of the agency to whom you will pay the garnishment
Enter the account number, if applicable
Select the Wage Garnishment Payable account you just set up as the account
On the next screen, “tax tracking type”, choose None
On the next screen, “taxes”, nothing should be checked
On the next screen, “calculate based on quantity”, choose Neither
On the next screen, “gross vs. net”, gross pay is checked…this is fine as this is not applicable to a set rate child support item (see note below)
On the next screen, “default rate and limit”, enter the default rate if you only have one employee subject to this item, if you will use with multiple employees then leave blank -you will set the rate in employee screens
Select Finish, a box will appear reminding you to set up scheduled liability payments for this item

If your garnishment is not a set amount, then you will select the calculation option that fits your needs.

Next, set up a liability payment schedule:

Go to Employees > Payroll Taxes and Liabilities > Edit Payment Due Dates / Methods
The payroll set up window will appear. Click continue on the “review your scheduled tax payments lists” screen that comes up first
Click continue on the next screen “add or edit scheduled payments for benefits and other payments”
On the next screen you should see the “Child Support” or other wage garnishment you just set up
Select it an choose Edit
Select your payment frequency on the next screen
Select Finish and then Finish again to close the payroll setup window

Finally, add the payroll item to the employee subject to the garnishment:

Go to Employee Center from icon bar or home screen
Select the employee, right click and choose Edit
Change the view to “Employee and Compensation Info”
Select the “Child Support” or other garnishment item in the deduction section
Enter the amount to deduct in the amount column
Click okay

Note: If you have garnishments that calculate on net wages and employee has multiple, list the one that should be calculated first at the top of their record.

There, it’s all set up!

I hope this has helped! I would love to hear from you so leave a comment, ask a question, or just say “Hi”. Please share this or post a review for me: Google or ProAdvisor