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Garnishment Fees 2020

I hope you can help me with this
We have 1 employee with garnishment bankruptcy
The disposable earnings are 2500
25% 625 I deduction this amount from payroll
Our company is entitled to $5 fees to fill out the form. so I sent to garnisher $ 620
So my question is this fee is an income for our company?

Thank you


  • Let's see - the employee is paid $2500 in disposable income (part of gross wages which the company deducts as wages expense) From the employee's disposable income (the employee's money) the employer withholds $625 for the garnishment - of which the employer retains $5 (of the employee's money which would otherwise be paid over for the garnishment).

    That is, the employer receives $5 of the employee's money as a fee for processing the garnishment.

    I'm curious to know what it might be other than income to the company. It is not a "discount" because it is not paid out of money belonging to the employer - it is the employee's money that the employer is paying on behalf of the employee. It is also not a reduction of the employee's wage.

    Even if it is treated ass reimbursement for expenses, the employer must reduce expenses by the amount of the fee (net effect is the same), however the expenses are probably primarily overhead rather than direct expenses - so the employer should record the fee as other income and expense the expenses intact. The audit trail in the accounting records is much clearer that way.