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Run the Payroll Fee Auditor →Blog · Payroll Management · Retail
Retail Businesses: Payroll Garnishments: What You Need to Know (2026)
Garnishments in retail businesses 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 retail business twist that high turnover and new-hire volume and multi-location payroll 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 a retail business
High turnover and new-hire volume, multi-location payroll, seasonal overtime spikes and tipped employee tracking 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. Commissioned employees of a retail or service establishment are exempt from overtime under section 7(i) only when three conditions are met: the employee works for a retail or service establishment, the regular rate exceeds one and one-half times the minimum wage for every hour worked in an overtime week, and more than half of total earnings in a representative period of one month to one year are commissions. A tipped employee is one who customarily and regularly receives more than $30 a month in tips.
At the BLS May 2025 national median for retail salespersons, $35,410 a year or $681 a week, a typical 25 percent cap on disposable earnings lands near $128 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.
- Commissioned employees of a retail or service establishment are exempt from overtime under section 7(i) only when three conditions are met: the employee works for a retail or service establishment, the regular rate exceeds one and one-half times the minimum wage for every hour worked in an overtime week, and more than half of total earnings in a representative period of one month to one year are commissions. If any condition fails, overtime is owed at time and one-half for hours over 40. [DOL Fact Sheet #20]
- A tipped employee is one who customarily and regularly receives more than $30 a month in tips. An employer must pay a tipped worker a direct cash wage of at least $2.13 per hour and may claim a tip credit of up to $5.12 per hour, and must make up the difference in any workweek where cash wages plus tips fall below $7.25 per hour. [DOL Fact Sheet #15]
Read the full guide to how to handle payroll garnishments, and the rest of the retail business payroll library.
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Frequently Asked Questions
How much of a retail business 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 high turnover and new-hire volume count toward a garnishment?
Yes. Anything paid as compensation for personal services is earnings under the CCPA, so high turnover and new-hire volume enter the disposable earnings calculation along with base pay.
Can a retail business 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 a retail business?
$45 per employee per month, all-inclusive, inside the payroll software you already use, with no monthly minimum. High turnover and new-hire volume, multi-location payroll and seasonal overtime spikes 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 Retail Businesses. 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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