Bobby -

What you are looking to do is not going to be an easy row to hoe. If you look at the Payroll help file topic "How checks are processed", pre-tax deductions are processed before employee taxes.  This being said, I would suggest you pre-process the taxes for the employee in your HI garnishment formula.

You can do lookups to the tax tables to simulate the tax processing that will occur and use that data to manipulate the amount of the deduction required in the pre-tax section. Basically you need to replicate the entire processing order from pay to after-tax deductions in your HI formula.  If you are a multi-state employer, then automating the required lookups based on Home/Work State will be even more difficult as you may need to process thru a reciprocity table (based on your setup).

John M. McLagan
Johnny on the Spot
(860) 982-8998

Thank you so much for the answer although it does sound extremely complicated.  However, I hope there is a small silver lining in that we are  a multi-state employer but the datafolders are all separate.  Would this be correct?  I do have to admit I am not even sure where to start with the formula but I am a bit surprised that SAGE does not address this with a KB.  It seems that other companies would have this issue also.  Thanks again John!! 

If anyone out there has a formula they are willing to share it would be greatly appreciated.

Hi Bobby,

If you haven't already, you may try to get clarification on this, as what you are asking is for something that is both based on disposable income, but also affects disposable income, so we have a chicken / egg thing happening.

We do have an example formula in the knowledgebase that can get you started:

How do I create a garnishment formula in Payroll? (22513) (Example 6).

One thing you may also consider is setting the employee up with a percentage for his withholding taxes instead of using the tax table. 

How do I withhold an additional tax amount in Payroll? (21619) has the steps to do this (you would select Replace Percent instead of Add-on).

I recommend talking with a tax specialist and the entities controlling the garnishment to make sure this would be OK.

Keep us posted!

Thanks Jesse.  I have already created the formulas using KB 22513 and that is when I figured out that the "Disposable Income" portion of the formula was returning "gross pay" since the Health is set up as pre-tax.  I am not familiar at all with using a percentage for withholding.  Am I understanding that the percentage would totally replace any taxes that would be figured using the tax tables? 

Once again I have to ask if this is a "unique" request.  From what I understand, this type of court ordered garnishment is not unusual for us.  The company has been on SAGE 300CRE for a lot of years but have never used formulas for court ordered garnishments.   I am in IT and fairly new to supporting this product, so I do not work with the product on a regular basis.  That being said, is this the best way to approach the issue?  Usually the employee has a court ordered child support which is first priority and then will have a court ordered health insurance garnishment which is second priority.  The employee may also have a court ordered Dental insurance garnishment.  Both dental and health are pre-tax deductions.  

Thanks again Jesse!  I so appreciate any help!