Payroll Services and the Child Support Question


There are a lot of good reasons small businesses choose to use payroll services rather than handling things in-house. Among them is a desire to simplify the payroll process as much as possible. Payroll is a complex beast that can cause problems for employers lacking the right kind of knowledge, as illustrated by the many questions surrounding child support withholding.

In the U.S., a worker’s wages can be garnished in order to ensure that court-ordered child support payments are made. A company affected by such an order would withhold a certain amount from the employee’s pay and forward it to whoever is entitled to receive it. The complexity of the system is the result of state laws, court systems, and federal tax regulations all having to coexist in order to make sure child support payments are made.

Working with a payroll service allows a small business owner to comply with the law without having to become an accounting specialist. Payroll services should already be familiar with child support and withholding, and should be able to take the necessary actions to maintain compliance.

Five Things You Might Not Know about Child Support and Withholding

As a small business owner yourself, the whole idea of withholding for child support may be new to you. If this is the case, your business may be a prime candidate for online payroll services. Here are five things you might not know about child-support and withholding; these are things that could affect the way you do business:

  1. Court Orders Always Prevail

Small businesses and their payroll services dealing with child support and withholding must always defer to court orders. Employees may balk at the amount of money being withheld, but there’s nothing the employer or payroll provider can do about it. They must do whatever they are instructed to do by the court.

  1. Withholding Must Continue

Once a court order requiring withholding for child support is issued, withholding must continue until the court, a child support agency, or another entity with legal authority notifies the employer or payroll provider that withholding can stop. The affected employee or recipient of child support cannot affect a stoppage.

  1. Employers Can Garnished Commissions

Employers can legally deduct an additional amount from an employee’s pay to cover the costs of administering withholding and child-support. These additional withholdings, also known as commissions, are affected by individual state laws, so employers and payroll services need to be familiar with those laws.

  1. Employers Can Withhold More Than Ordered

If an employee paying child support requests a greater amount be withheld than was ordered by the court, employers can certainly accommodate that request. This may be done to settle arrears or to avoid overdue payments in the future. However, withholding more than ordered is regulated by individual state law.

  1. Employers Can Be Penalized for Failing to Comply

Every state has penalties in place for employers that do not comply with child-support and withholding orders. Payroll services are also subject to penalties as well. The states take child-support very seriously, and they expect employers and their payroll services to do as ordered by the courts.

Withholding and making child-support payments only increase the burden of handling payroll in-house. It is something that most small businesses are not really prepared to do when that first court order comes through. So for many of them, outsourcing payroll to a contracted provider is the best way to go. Payroll services take the headache out of payroll by handling these sorts of complex things on behalf of their clients.