What is wage and salary garnishment? 

A wage and salary garnishment allows creditors to access a debtor's income through the employer in order to settle outstanding debts. Since earnings are often the only basis for enforcement, but at the same time the debtor's subsistence level must be protected, the following legal provisions create a balance between creditor and debtor protection: 

• Code of Civil Procedure (ZPO), as well as the current attachment exemption limits announcements of the Federal Ministry of Justice (BMJV) 
• Tax Code (AO).
• Administrative Enforcement Act (VwVG)
• Judicial Enforcement Code (JBeitrO)

The employer plays a central role as a third-party debtor – once an attachment order has been issued, the debtor may no longer pay out the garnished portion of the income to the debtor. However, only the net wages are garnished; taxes and social security contributions remain unaffected.

Attachable earnings from employment 

Attachable earnings include all income that is paid in monetary terms and results from current or previous employment. This also includes services that are based on a promise. According to Sections 850 - 850i ZPO, earnings can only be garnished to a limited extent in order to secure the debtor's minimum subsistence and avoid state welfare benefits.

Earnings include:

• All forms of monetary remuneration, regardless of their nature (e.g. commission, profit sharing, piecework or time wages) or the validity of a work contract
• Vacation pay or allowance
• Pensions, gardening leave pay and annuities from insurance contracts to provide for the employee or their dependents 

Non-attachable earnings

Some income is completely protected from garnishment according to Section 850a ZPO. These include:

• Vacation pay, bonuses for company anniversaries and loyalty bonuses within the usual limits
• Expense allowances, travel expenses, danger, dirt or hardship allowances within the usual limits
• Half of the earnings from overtime
• Marriage and birth allowances, childcare allowances, study grants
• Death and grace benefits
• Supplements for the blind
• Christmas bonuses up to half of the basic monthly allowance 

In case of doubt, the labor court will decide whether a benefit is exempt from attachment.

Severance payments

Severance payments are generally classified as earned income, but they are not considered regular income and therefore fall under Section 850i ZPO. In this case, severance payments may be subject to conditional attachment if the enforcement court ensures that the debtor is left with an appropriate amount for their necessary upkeep. Severance payments under a social plan are protected from attachment. The same applies to a claim for damages due to termination without notice. 

Benefits in kind

Wages in kind, such as benefits in kind (e.g. board and lodging), are generally not subject to attachment, as they cannot be easily transferred to third parties. However, they may be subject to conditional attachment if excessive in value and the enforcement court allows attachment in the individual case.

Conditionally attachable amounts

Conditionally attachable amounts are earnings that may only be attached under certain conditions according to Section 850b ZPO. Garnishment is only possible here if enforcement against the debtor's remaining assets has been unsuccessful and the enforcement court has expressly approved the attachment at the creditor's request. 

These include: 

• Pensions and other benefits from old age, disability or survivors' benefits
• Maintenance payments received by the debtor from third parties

Please note:
The enforcement court's approval of garnishing conditionally attachable amounts always takes into account the specific circumstances of the individual case, such as the debtor's income and assets, as well as the nature and amount of the creditor's claim.

Employer's responsibilities

1. The garnishment must be calculated and documented in the payroll, and the garnished amounts must be transferred to the creditor. 
2. All documents and calculations related to the garnishment should be carefully kept so that they can be presented for future inspections. 
3. The employer must submit a third-party debtor declaration within two weeks of service of the attachment order. 

Please note:
A garnishment does not give rise to any additional reporting obligations to the social security institutions or the tax office.

The wage garnishment process

A garnishment is usually initiated by a creditor who has obtained an enforceable deed against the debtor. The execution is carried out by a bailiff or the competent enforcement court. 

1. Application for an attachment and transfer order

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  • The creditor applies to the local court for an attachment and transfer order
  • The decision is served on the third-party debtor (e.g. employer)
  • This determines which part of the income must be attached and transferred to the creditor 

1. Third-party debtor declaration 

•  
  • The third-party debtor must submit a third-party debtor declaration within two weeks of the attachment order being served 
  • This includes information about the debtor’s attachable earnings and any other garnishments

1. Withholding and transfer 

•  
  • The employer is obliged to withhold the attachable part of the income and transfer it to the creditor

The debtor has the right to raise objections to the attachment if, for example, the exemption amount was not calculated correctly or if there are unjustified claims.

All parties involved must comply with the legal requirements, and the employer is obliged to implement the attachment properly. 

Types of wage garnishment 

There are different types of wage garnishments that differ in their legal basis and purpose. The most important for payroll accounting are: 

Garnishment exceptions

The garnishment exemption limits regulate which part of the debtor's earnings are protected from attachment, to maintain their minimum subsistence level. The limits are set out in Section 850c ZPO and are regularly adjusted to reflect changes in the basic tax allowance. 

Since July 1, 2024, the basic amount exempt from attachment is €1,499.99. This amount increases gradually for each person the debtor legally and actually supports: 

Please note:
The amount that can be garnished can be viewed in the wage garnishment table of the Federal Ministry of Justice.

The exemption limits are always adjusted on July 1 of each year. The current values are valid until June 30, 2025.

Preferred creditors

If the creditor is a preferred creditor, their claims are based on maintenance claims, such as those of children, spouses or life partners. In such cases, the provisions of Section 850d ZPO apply, which can lead to the usual garnishment exemption limits being reduced. 

Even non-attachable earnings as set out in Section 850a No. 1, No. 2 and No. 4 ZPO can be attached for maintenance claims under certain conditions. In such cases, the exempt amount that must remain with the debtor is determined by the enforcement court. The employer is obliged to comply with this decision. 

Impact of wage and salary garnishment on taxes and social insurance 

A wage garnishment has no effect on the tax or social insurance-related treatment of income. The employer remains obliged to pay income tax and social security contributions on the entire remuneration.