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Run the Payroll Fee Auditor →Blog · Payroll Management · Auto Dealership
Auto Dealerships: Payroll Garnishments: What You Need to Know (2026)
Garnishments in auto dealerships follow the federal Consumer Credit Protection Act limits, 25 percent of disposable earnings or the amount above 30 times the federal minimum wage, whichever is less, with the auto dealership twist that front-end and back-end commission structures and flat-rate tech pay count as earnings. BEG: $45 per employee per month inside the payroll software you already use, live in 3 to 5 days.
The federal limits
Title III of the Consumer Credit Protection Act caps ordinary garnishments at the lesser of 25 percent of disposable earnings or the amount by which weekly disposable earnings exceed 30 times the federal minimum wage, $217.50 a week at $7.25. Child support orders can reach 50 to 65 percent, and tax levies and bankruptcy orders have their own tables. Disposable earnings are gross pay less legally required deductions, not less voluntary ones like a 401(k) or health premium.
What counts as earnings in an auto dealership
Front-end and back-end commission structures, flat-rate tech pay, F&I chargebacks and draw-against-commission are all earnings for garnishment purposes when they are paid as compensation for personal services, so the order applies to the whole check, not the base rate. The FLSA does not require weekly pay, but the dealer must set a regular pay period, and a commission settlement period is presumed to be that pay period. A commissioned employee of a retail or service establishment is exempt from overtime under section 7(i) only if the regular rate of pay is more than one and one-half times the applicable minimum wage and more than half of compensation for a representative period of not less than one month is commissions on goods or services.
At the BLS May 2025 national median for automotive service technicians and mechanics, $50,620 a year or $973 a week, a typical 25 percent cap on disposable earnings lands near $183 a week, and the exact figure depends on that employee's required deductions.
Processing rules that avoid employer liability
An employer that ignores an order can become liable for the amount it should have withheld. Orders are answered by their deadline, multiple orders are stacked in the priority the law sets (child support first), the employee is not disciplined for a single garnishment, and withheld amounts are remitted to the issuing agency on its schedule with the case number on every payment.
The rules behind this page, with sources
General information, not legal advice. Every rule below was read on the agency page linked next to it.
- The FLSA does not require weekly pay, but the dealer must set a regular pay period, and a commission settlement period is presumed to be that pay period. Draws against commission paid within the pay or settlement period may be less than the minimum wage, and the employer may credit those draws against its minimum wage obligation when settling the amount due at the end of the period. [DOL Fact Sheet #11]
- A commissioned employee of a retail or service establishment is exempt from overtime under section 7(i) only if the regular rate of pay is more than one and one-half times the applicable minimum wage and more than half of compensation for a representative period of not less than one month is commissions on goods or services. [29 CFR 779.412]
Read the full guide to how to handle payroll garnishments, and the rest of the auto dealership payroll library.
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Frequently Asked Questions
How much of an auto dealership employee's pay can be garnished?
For ordinary debts, the lesser of 25 percent of disposable earnings or the amount over 30 times the federal minimum wage per week. Child support can take up to 50 to 65 percent depending on arrears and dependents.
Do front-end and back-end commission structures count toward a garnishment?
Yes. Anything paid as compensation for personal services is earnings under the CCPA, so front-end and back-end commission structures enter the disposable earnings calculation along with base pay.
Can an auto dealership fire an employee over a garnishment?
Not for a single debt. The CCPA prohibits discharge because earnings have been garnished for any one debt; state law often extends that protection further.
What does managed payroll cost for an auto dealership?
$45 per employee per month, all-inclusive, inside the payroll software you already use, with no monthly minimum. Front-end and back-end commission structures, flat-rate tech pay and F&I chargebacks are configured at setup, not billed as add-ons.
Related Resources
Anthony leads payroll solutions at Business Executive Group, a national managed payroll firm serving businesses across industries including Auto Dealerships. BEG manages payroll at $45 PEPM, all-inclusive, with deep expertise in compliance, multi-state filing, and industry-specific payroll requirements. Get instant pricing at beghr.com.
Authoritative source: U.S. Department of Labor: Wage Garnishment
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