FAQ on US Garnishment Processing
Q1. What is a garnishment?
A1. Garnishments are payroll deductions which differ from other types of deductions in that they are governed by goverment and judicial rules. They are compulsory for both the employee and employer. The employer generally is liable for 100% of the amount it fails to withhold pursuant to a garnishment order and penalties and punitive damages can be imposed for failure to properly comply with the terms and conditions of an order.
Q2. How is a garnishment initiated and what is the process?
A2. Generally, an employee experiences financial trouble and a court mandates an order that stipulates the deduction amount and frequency which is received by the employee's HR department, the information is then entered into R/3, the amount is deducted when processing RPCALCU0, the vendor is paid via Third Party Remittance and the employee and vendors are notified of these deductions through automatically generated letters.
Q3. What types are garnishments are there?
A3. R/3 handles 5 main categories:
Support (child, spousal, and medical)
Federal debts (student loans and administrative wage
Federal and State Tax Levies
Q4. What is the difference between Exempt and Non-Exempt amounts?
A4. The exempt amount is the amount which cannot be taken to satisfy a
garnishment and the non-exempt amount is the amount that can be taken.
Q5. How is the exempt and non-exempt amounts calculated?
A5. Various rules apply based on the type and priority of the garnishment. There are Federal and State rules and the state rules will vary from state to state.
Q6. What if an employee has multiple garnishments?
A6. Garnishments are processed based on priority rules. Generally, child support orders have the highest priority, Federal Tax Levies have the second highest priority and then other types of garnishments are on a first come, first serve basis.
Q7. What infotypes are used within R/3?
A7. There are three infotypes designated for garnishment processing:
IT0194 - Garnishment Document
IT0195 - Garnishment Order
IT0216 - Adjustments
The document information is entered on IT0194 and the actual deduction amount and frequency is entered on IT0195. The two infotypes are linked via a system generated internal number and you can have multiple orders (IT0195) for one document (IT0194) and these are linked via a system generated sequence number. Infotypes 0195 and 0216 can only be created once an IT0194 record has been created and saved. For processing purposes, RPCALCU0 reads IT0195.
Q8. How do I make changes to an existing Garnishment Order (IT0195)?
A8. With Edit -> Copy, you can make changes to the Order, but keep the same sequence number and maintain a history in the system. With selecting Change, you can make changes but no history is maintained. Also, a change can be made through creating a new IT0195 which maintains history, however a new sequence number is generated and the order is now processed as a separate order in R/3 and does not cumulate as part of the original order. IT0195 should always be accessed via IT0194 when making changes.
Q9. When should I use the Adjustment IT0216?
A9. IT0216 should be used to correct errors in RPCALCU0; additional deductions are required; to enter a new balance; refund from vendor; exceptional payments; separate calculation; calculate end date;
or stopped vendor payment.
Q10. What are the relevant tables for Garnishment Processing?
A10. T5UG0 - Garnishment Order Types
T5UG1 - Garnishment Categories
T5UG2 - Adjustments to the Disposable Net
T5UG3 - Model for the Non-exempt amount
T5UG4 - Rules for calculation of Non-exempt amount
T5UG5 - Model Key and Text for Adjustments to the Disposable Net
T5UG6 - Government Rules for Service Charges
T5UG7 - Government Rules for 3PR
T5UG8 - Company Rules for 3PR
T5UG9 - Garnishment Default Values
T5UGA & T5UGB - Special Rules for the Calculation of the
T5UGA - Rule Key/Names & Texts for special variables to
display on IT0195 screen
T5UGB - Sequence of Operations to be performed
T5UGC - Service Chg Rule Key and Text for Country/State/Document
T5UGD - Levy Form - Filing Status listed
T5UGE & T5UGF - Levy Form - Exempt amount and additional
exempt amount for each filing status
T5UGG - Company Rules for Service Charges
T5UGH - Levy Form - Forms Defined
T5UGI - Letters - Select Form & User exit for letter type
T5UGJ & T5UGK - Not Customizing Tables, used for the Printing
Request for the Notice and Answer Letters
T5UGL - Letters - Definition & location of user exit
T5UGM - Garnishment Originator on IT0194
Payroll Processing -
Q11. What are the wage types associated with Garnishments?
A11. /G00 - Disposable Net
/G01 - Gross for Garnishment
/G02 - Completely Non-exempt
/G03 - Garnishment Total Amount Deducted
MG10 trough MG70 delivered templates for Garnishments to be taken
Q12. What are the Garnishment Cluster Tables and what do they represent?
A12. GRDOC - corresponds to garnishment document (IT0194)
GRORD - corresponds to garnishment order (IT0195) or garnishment
GRREC - actual deductions and wage types and also used to carry
Q13. Where are garnishments calculated in RPCALCU0?
A13. Garnishments are processed via the schema UGRN following the calculation of taxes (UTX0). The actual amount to be taken is
calculated with the function UGARN.
Q14. What is the main garnishment Include?
A14. The main garnishment include is RPCPIUU0 - forms called by
UGARN. Also of importance is RPCPIUF0 - function UGARN.
Quick Tips for Troubleshooting Garnishment Processing
Q1. What are some items to check when troubleshooting Garnishment Processing in R/3?
A1: Review the following:
- On IT0194, check the validity dates, determine what kind of garnishment, how many are involved and the status of the garnishment (e.g. active, pending).
- Check the IT0195 validity dates and note the Remit Rule, deduction amount, frequency and how many IT0195's are involved.
- Review RPCLSTRU and the payroll dates in question, keep in mind the information found on IT0195 and the Garnishable period is from the beginning of the pay period to the actual check date. Garnishments are deducted based on the check date.
- Within the EE's results, also check for wage types /G00, /G01, /G02 and /G03 and the wage type for the garnishment to see how much was deducted.
- Still within the EE's results, review the GRORD record and check the limit, disposable net, month to date, deduction to vendor (DEVEN) and the deduction from infotype (DEINF).
- Multiple garnishment processing, be sure the system can legally take all the garnishments.
- Check schema UGRN for any customer modifications.
- Double check that Notes have been applied correctly and completely.
- Review the Garnishment History either via IT0194 or IT0195 which lists the actual deductions taken with the check date.
- Also via IT0194 or IT0195, you can view Customizing details (Environment -> Customizing details; 4.6C Extras -> Customizing Review)
- Both the Disposable Net and calculated Net Pay should be the same.
Q2. Why was an IT0216 record not processed?
A2. IT0216 can be edited/deleted before running payroll. If payroll is run and there is no wage type listed on IT0216, this record will not be read nor will it be posted to FI.
Q3. Why does a deduction occur after the initial balance has been met?
A3. It is most likely misconfiguration of the Ordre Category (table T5UG0). Usually, it is a State Levy that has been given the Order Category of a Federal Levy. A State Levy should have the Order Category '3' for Generic in table T5UG0. The order category '2' Levy only applies to a Federal Levy. Also, a Federal Levy will not stop when an initial balance is reached because by law, it can only be manually stopped by changing the status of IT0194 to '4' Released, once the company has received Form 668-D from the IRS. (Please Review Related Note 521735.)
Q4. How is General Disposable Net calculated?
A4. There are two ways to calculate general Disposable Net (/G00).Either start with the gross amount (/101) and subtract exempt amount or start with 0 and add up all the earning wage types to be included (e.g. M003). This is configured via PRCL 59, double check the values for the wage types in question for this PRCL. A useful tool for checking Processing Classes for wage types is program RPDLGA20 (choose the Output radio button 'Tree Structure').
Q5. How are garnishments and Arrears handled?
A5. Garnishments do not follow the same Arrears principles as other deductions. The arrears functionality for garnishments only refers to deductions within a particular month. If the total amount of a garnishment cannot be taken for the month, the remaining amount does not carry forward to the next month. The values for Arrears processing are set in table T51P6 and for all garnishment wage types, the value for Arrears should be a '4' and the Retro column should be blank in this table.(Please see Note 338841.)
Q6. Can Garnishment wage types be entered on a NAMC (IT0221)?
A6. No, Garnishment wage types cannot be entered on IT0221.There is a V0 split indicator that connects garnishment Wage types to garnishment tables and there is no V0 split on IT0221.
Q7. How are garnishmnents handled during Retroactive Accounting?
A7. Garnishments will not recalculate in a retrocalculation. The amount originally deducted continues to be carried forward. Consequently, no retroactive changes should be performed for garnishments. If changes need to be made, perform an EDIT - >COPY operation that will result in delimiting the IT0195 record.
Q8. What do I check for priority issues; double, incorrect or missing deductions?
A8. First check IT0194 and IT0195 and their validity dates and priority. Make sure the Rule in IT0195 was customized to do what is expected. Look at the Disposable Net and Non-exempt models.
Q9. What should I check if Payroll Abends within UGARN?
A9. Check the payroll results GRREC for a record without a wage type.
Q10. Is it possible to specify a percentage or portion of a wage type?
A10. At this time, the garnishment module does not offer a functionality that would allow specifying a percentage and/or portion of a wage type to be deducted other than from gross and net. The workaround is to create a special rule with the garnishment orders having different priorities and different IT0194 records.