What Defines Disposable Wages?

Did you know that some states have their own definition of what “disposable wages” are?  Typically we think of gross-less-taxes as “disposable wages”, but this is actually the federal rule.

Some states subtract additional items in their calculation of “disposable”.  For example, the state of Connecticut defines disposable wages as gross less federal, state, local and employment taxes, but they also subtract normal retirement contributions, union dues and initiation fees, and group life and health insurance premiums.

You should contact the State Department of Labor in the states where you pay to determine calculation methods for disposable wages in order to pay Child Supports and Garnishments accurately.

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Payroll Manager Sarah Williams, Edwin Watts Golf, LLC

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