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Consumer Credit Protection Act
Calculating Payroll Withholding
Here’s an example of how to calculate payroll withholding for an employee who has been ordered to pay support.
The Consumer Credit Protection Act (CCPA) sets federal withholding limits for child support and alimony. These limits are based on your employee’s Aggregate Disposable Weekly Earnings (ADWE), which is calculated by subtracting from the employee’s gross earnings any taxes and mandatory retirement deductions. Health insurance premiums, union dues, other child support garnishments, and money owed to the employer are not deductible when determining ADWE.
Example
Your employee (the obligor—the person owing child support) has three separate child support cases and does not earn enough to pay the full obligation in each pay cycle. Perform the following calculations.
Total Child Support Obligation
Add up the obligor’s total child support obligation per month:
Here’s an example of how to calculate payroll withholding for an employee who has been ordered to pay support.
The Consumer Credit Protection Act (CCPA) sets federal withholding limits for child support and alimony. These limits are based on your employee’s Aggregate Disposable Weekly Earnings (ADWE), which is calculated by subtracting from the employee’s gross earnings any taxes and mandatory retirement deductions. Health insurance premiums, union dues, other child support garnishments, and money owed to the employer are not deductible when determining ADWE.
Example
Your employee (the obligor—the person owing child support) has three separate child support cases and does not earn enough to pay the full obligation in each pay cycle. Perform the following calculations.
Total Child Support Obligation
Add up the obligor’s total child support obligation per month:
| Case | Amount |
|---|---|
| Case #1 |
$260 |
| Case #2 |
$50 |
| Case #3 |
$121 |
| Total | $431 |
Obligor’s ADWE
Determine what the obligor’s ADWE is for that pay cycle. Let’s say it is $400.
Percentage of Obligor’s ADWE Withheld
Determine what percentage of the obligor’s ADWE is to be withheld and send to the Child Support Enforcement Agency (CSEA) for child support, based on the following:
To determine the amount to deduct and remit for each of the 3 child support cases in this example:
Determine what the obligor’s ADWE is for that pay cycle. Let’s say it is $400.
Percentage of Obligor’s ADWE Withheld
Determine what percentage of the obligor’s ADWE is to be withheld and send to the Child Support Enforcement Agency (CSEA) for child support, based on the following:
- 50% if the obligor is supporting another dependent not on one of the support orders mentioned above
- 60% if there are no other dependents in the obligor’s home
To determine the amount to deduct and remit for each of the 3 child support cases in this example:
- Divide the portion of ADWE being withheld for child support ($200) by the obligor’s total obligation of all cases ($431).
- $200 ÷ $431 = .46404
- Multiply the answer (.46404 - and do not round off) by each of the obligor’s obligations to determine what you should withhold and send to CSEA for each case.
| Answer x Obligations |
Withholding |
|---|---|
| $260.00 x 0.46406 |
$120.65 for Case 1 |
| $50 x 0.46404 |
$23.20 for Case 2 |
| $121 x .46404 |
$56.15 for Case 3 |
| Total | $200 |