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How to Set Up Child Support Deductions in Payroll

Overview

A child support deduction in Patriot Software withholds court-ordered child support payments from an employee’s paycheck. If you receive a child support Income Withholding Order (IWO) for an employee, you must set up a child support deduction in Patriot Payroll to comply with the order.

For background on employer responsibilities, visit the Office of Child Support Enforcement website. For details on withholding limits, see What Employers Should Know About Child Support Withholding.

Important: Setting up a child support deduction in Patriot Software is a two-step process. You must first add the child support deduction at the company level, then assign that deduction to the specific employee.

Step 1: Add the Child Support Deduction at the Company Level

Adding a child support deduction at the company level is a one-time setup that creates the deduction so you can later assign it to one or more employees.

  1. Go to Settings > Payroll Settings > Deductions & Contributions
  2. Click Add New.
  3. For Type, select Post-Tax % Disposable Net Pay. Child support deductions are post-tax, meaning child support amounts are taxable and included with gross wages when calculating income tax.
  4. For Description, enter “Child Support” or a similar name.
  5. For Method, select Percent. Most child support orders specify a fixed dollar amount, but child support withholding is also subject to percentage-based limits under the Consumer Credit Protection Act (CCPA — the federal law that caps how much of an employee’s disposable earnings can be garnished for child support).
  6. Leave the Amount field blank at the company level. The child support amount varies by employee and will be entered when you assign the child support deduction to each employee’s record.
  7. Leave the W-2 Box field blank, unless you want child support payments to appear on the employee’s W-2 for informational purposes. Showing child support on the W-2 is optional.
  8. Leave the Limits fields blank at the company level. Limits are entered per employee, based on each employee’s specific child support order.
  9. Click Save.

Setting Up Multiple Child Support Deductions for One Employee

If a single employee has more than one child support order, you must add a separate child support deduction at the company level for each order. Repeat the company-level setup steps above and name the additional deductions “Child Support 2,” “Child Support 3,” and so on, so you can track each child support order separately.

Step 2: Assign the Child Support Deduction to the Employee

After the child support deduction has been added at the company level, assign it to the employee who is subject to the child support order. The instructions below apply to an employee with a single child support order. Employees with multiple child support orders are more complex and may require calculations outside of Patriot Software to ensure correct child support amounts are being deducted

  1. Go to Payroll > Employees > Employee List
  2. Select the employee name from the employee list.
  3. Click the Deductions & Contributions link on the employee’s record.
  4. Click Add New. A set of blank fields will appear.
  5. For Deduction, select “Child Support” (or the name you used) from the list of deductions previously created at the company level.
  6. Method will automatically display “Percent” based on the company-level setup.
  7. For Amount Per Pay, enter the percentage of disposable income to withhold. CCPA limits normally range from 50% to 65% of disposable income, based on the employee’s situation. Your state may set a lower percentage limit than the CCPA. For details on which CCPA percentage applies, see What Employers Should Know About Child Support Withholding.
  8. Under Limits, enter the Pay Date limit. The Pay Date limit is the dollar amount of child support to withhold each pay date, as listed on the child support order. If the child support order specifies a monthly amount, you must convert that monthly amount to a per-pay-period amount (see worked example below).
  9. Click Save.

Worked Example: Calculating the Child Support Deduction

The following example shows how to calculate the values to enter when assigning a child support deduction to an employee.

Scenario:

  • The Income Withholding Order specifies $200 per month in child support.
  • The employee is not past due on child support payments.
  • The employee is single and does not support a second family.
  • The employee lives in a state that follows the federal CCPA limits.
  • The employee is paid biweekly (26 pay periods per year).

Values to enter:

  • Amount Per Pay: 60% — the CCPA limit for a single employee who does not support a second family and is not past due on child support.
  • Pay Date Limit: $92.31, calculated as follows:
    • $200/month × 12 months = $2,400/year
    • $2,400/year ÷ 26 biweekly pay periods = $92.31 per pay date

Remitting Child Support Payments

After the child support deduction has been assigned to the employee, Patriot Software will withhold the child support amount from the employee’s paychecks going forward.

Patriot Software does not remit child support payments to child support agencies, even on Full Service Payroll. Patriot’s Full Service Payroll handles payroll tax filings and deposits, but child support is not a tax — it is a court-ordered withholding. As the employer, you are responsible for sending the withheld child support amounts to the appropriate child support agency on time, regardless of which Patriot payroll plan you use.

Disclaimer

The information in this article is not legal advice. As the employer, you are responsible for ensuring that child support deductions are calculated correctly based on the federal and state laws that apply to your business, your employees, and the specific circumstances of each child support order.

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