This article explains how you can manage garnishments with Personio Payroll.

What are garnishments in Personio Payroll?

Garnishments are salary deductions that you, as an employer, pay directly to a creditor on the basis of a court order or a contractual agreement (e.g., with a bank). Supported cases are:

• Regular income garnishment, also known as salary garnishment, wage garnishment, or property garnishment (example: rent arrears)
• Maintenance garnishment (example: Child or spousal support)
• Assignment (example: bank loan)
• personal bankruptcy

Each garnishment case is custom and always relates to a single employee. Employers are legally obliged to correctly calculate and pay the deductions resulting from garnishment cases. The calculation is performed in accordance with legal requirements, in particular the garnishment tables (net method), and can take into account fixed amounts or special (garnishment) exemption limits.

You can find further details on wage and salary garnishments in our article on the theme.

How are garnishments managed in Personio Payroll?

Personio Payroll manages garnishments in a structured manner via garnishment cases and monthly garnishment values. This allows you to keep track of ongoing cases and their impact on payroll at all times.

Below, we explain the key terms and the monthly payroll run process. For further information on wage and salary garnishments in general, please also read our article on the theme.

garnishment cases

A garnishment case is the basic incident that is created once in Personio in the Salary tab of the employee profile and then remains in place for the entire duration of the garnishment. It contains all static information, such as:

• the creditor,
• the original total amount of the attachment,
• the calculation rules and specifications from the court order.

This data remains unchanged throughout the entire garnishment process and forms the basis for the monthly calculations.

Monthly garnishment values

The monthly garnishment values are closely linked to payroll accounting. They reflect how much is actually seized in each month. These values may change from month to month, for example due to:

• Changes in garnishable income or other influencing factors (example: Variable income with hourly salary)
• Customizing or overwrites in payroll accounting

You can view monthly garnishment amounts in the Monthly Overview tab under Employee Profile > Salary > Garnishments as soon as a garnishment case has been added.

Please note:
Please note that after setting up a garnishment case, it takes a moment for the monthly values to be displayed.

Ongoing calculation and garnishment deduction

Every month, Personio automatically calculates the actual garnishment deduction based on:

• the remaining pending amount and
• the applicable calculation rules. 

The amount seized is deducted from the pending total amount, so that the outstanding amount is reduced month by month. You can view the total amount already garnished and the garnishment deduction for each month in the monthly overview under Employee Profile > Salary > Garnishments. You can also see the garnishment deduction and the pending amount in your payslip.

Product limitations

The garnishment function does not currently support the following cases automatically:

• Determining the order of priority of multiple attachments: The ranking and parallel operation are not shown. You must control the sequence and editing manually.
• Multiple garnishments prorated: Prorated handling, for example on a percentage basis, is not possible.
• Consideration of income from multiple employment relationships: External income cannot be automatically included. You can use the feature to create a SEPA file, but you must overwrite the amounts manually.
• Calculation using the gross method: Only the net method is supported. The gross method is no longer used today and may no longer be used for new garnishments.
• Automatic interest on the remaining balance: You must enter interest manually. For example, you can customize the pending amount to the interest in the last deduction month.

Manage garnishments in the Salary tab

About the managing of garnishments

In the Salary tab of the employee profile, you will see the Garnishments widget. Here you can manage all ongoing garnishment cases. You can create new cases, edit existing ones, close them, or delete them. Only ongoing garnishment cases are displayed; completed cases can be found in the Complete Garnishments section.

Create a new garnishment case

To create a new garnishment case:

1. Navigate to the employee profile and open the Salary tab.
2. In the Garnishments widget, click Manage.
3. Read the information under Ongoing Garnishment, confirm it, and click the button to add a garnishment.
4. Enter all the required information.
5. Save the garnishment case.

Please note:
The input fields are interdependent and are validated automatically (example: IBAN format, values > €0, plausibility of periods)

Edit a garnishment case

You can edit a garnishment case at any time, for example, to correct incorrect information:

1. Open the employee profile and the Salary tab.
2. In the Garnishments widget, click Manage.
3. Select the relevant ongoing garnishment.
4. Click on the three-dot menu and select Customize garnishment details.
5. Make the desired changes and save them.

Please note:
Changes to garnishment cases are retroactive and may trigger amendments to past payslips.

Monthly adjustments, for example in the case of an unscheduled payment or correction, can be customized in the Monthly overview section. Read the following section to find out how to do this.

Make a monthly customization

To make monthly adjustments, for example, to respond to changes in the monthly garnishable income or court adjustments to the garnishment amount, proceed as follows:

1. Open the employee profile and the Salary tab.
2. In the Garnishments widget, click Manage.
3. Open the Monthly Overview tab and select the appropriate month.
4. Click Edit, select the type of customization or overwrite you want to make, and continue.
5. Make the desired changes and confirm them.

The adjustment or overwriting is applied exclusively to the selected month. It mainly refers to overwrites of the garnishment deduction and current maintenance. The automatic calculation will apply again in the following month.

Close a garnishment case

A garnishment case ends as soon as there are no more debts—usually because the entire amount has been paid off. In the event of insolvency, a court order or the insolvency administrator will announce the end of the proceedings. Depending on the type of garnishment, Personio Payroll displays the upcoming end date differently and supports you in closing the case:

Close a garnishment case

To close a regular garnishment case because the amount has reached $0, proceed as follows:

1. Open the employee profile and the Salary tab.
2. In the Garnishments widget, click Manage.
3. Open the Monthly Overview tab.
4. Click on Complete attachment and confirm your entry.

The case is then marked as complete and moved to the Closed Garnishments tab. The Complete garnishment button is only displayed in months where the pending amount after deduction is $0.

Conclude a garnishment case due to personal bankruptcy

To complete a garnishment, enter the final amount to be garnished in the month the bankruptcy is finalized. Proceed as follows:

1. Open the employee profile and the Salary tab.
2. In the Garnishments widget, click Manage.
3. Open the Monthly Overview tab.
4. Click Edit and select Complete personal bankruptcy.
5. Enter the remaining amount and close the garnishment. Make sure that sufficient income is available in the respective month to cover this deduction.

The case is then marked as complete and moved to the Closed Garnishments tab.

Delete a garnishment case

You can delete a garnishment case if it was created in error. Deleting is final and cannot be undone.

1. Open the employee profile and the Salary tab.
2. In the Garnishments widget, click Manage.
3. Select the attachment.
4. Click on the three-dot menu and select the option to delete the attachment.
5. Confirm the process.

Garnishments in payroll and documents

Garnishments in payroll

In Personio Payroll, garnishment amounts are taken into account as follows:

• In the People tab: In the employee's detailed view, you can see the garnishment deduction for the month under One-time compensation. 
• In the Tasks tab: Be notified when a garnishment can be completed. 

Amendments and retroactive changes (example: Salary increases, new court rulings) are automatically transferred to the next payroll run and processed correctly via the SEPA file.

Garnishments in documents

In payslip

Garnishments appear as a net deduction with a specific identifier for each type of garnishment:

• 55101-Seizure of property, indicating both regular income garnishment and bankruptcy.
• 55201-Maintenance garnishment
• 55301-Assignment

Under "Remaining garnishment," you will see the remaining balance of the current garnishment. In the case of insolvency seizures, "–" is displayed here.

SEPA file

A separate SEPA payment is created for each garnishment. Transfers to creditors for garnishments are not included in the SEPA file for salaries, but are provided in a separate file for download. Amendments will be taken into account in the next SEPA export. Positive additional payments are added up, and excess payments are deducted in the following month.

Frequently asked questions about garnishments

Where can I find the pending amount?

You can view monthly garnishment amounts in the Monthly Overview tab under Employee Profile > Salary > Garnishments as soon as a garnishment case has been added.

I have several garnishment orders against the same people: How do I proceed?

Based on the applicable legal situation, you must determine which attachment takes precedence and set the order accordingly. Actual, you can only register one garnishment per people within a billing period.

What happens if there are amendments for the employee for whom a garnishment has been filed?

If amendments are triggered in past payroll periods that affect automatically calculated garnishment deductions, the deductions are also corrected.

Can I display garnishments for employees with additional employment relationships?

If income from other employment relationships must be taken into account when calculating the garnishment, this cannot be supported automatically in actuality. However, you can manually enter garnishment deductions on a monthly basis.

How is interest on garnishments taken into account?

You must manually enter interest in the pending garnishment amount.

The number of underhalts-eligible people has changed. How should I proceed?

If the number originally entered was incorrect and needs to be corrected, you can edit the garnishment case. The change then takes effect retroactively from the start of the garnishment.

If the number changes at a certain point in time, you should record this in a new garnishment case. Close the existing case and create a new one starting from the following month, including the new number of dependents.

Are garnishments included in the accounting report?

Yes - Under Payroll > Manage > Accounting Report, you can enter the posting text and account number for the respective garnishment types in the Net Pay & Deductions section.

Are garnishments shown on the payroll account?

In the payroll account, you can see garnishments in the total net deductions.

How do I take into account garnishable net income from multiple jobs?

If income from a secondary employer needs to be taken into account, the garnishable net income from the secondary employer should be reported to the primary employer (Personio customer) promptly after the payroll run. Add both garnishable net incomes and take the correct garnishment amount from the actual garnishment table. Then enter the value manually as a garnishment deduction in the widget for the current payroll run. In this case, a retroactive correction for the previous month is not possible.

What should I do if the court changes the order of priority of several attachments?

Only one garnishment can be managed at a time in the widget. If the court changes the order, first note the pending amount of the first attachment. In the actual billing month, overwrite the pending amount of the first garnishment to $0 so that it is considered complete (also possible retroactively). Close garnishment no. 1 and create garnishment no. 2 from the next payroll month. After completion of attachment no. 2, attachment no. 1 can be resumed with the remaining balance.