Garnishment payable definition
/What is a Garnishment Payable?
A garnishment payable is the amount that a business owes to the applicable court or other agency that has required funds to be withheld from an employee 's paycheck . Garnishments may be associated with unpaid taxes, unpaid loans , child support, spousal support, and similar matters. These amounts should be recorded within a separate garnishment payable liability account, so that the accounting staff can more closely track the status of these payments.
Accounting for Garnishments Payable
A garnishment transaction is not an expense. Instead, it is a deduction from an employee’s pay, which the employer forwards to the requesting party (such as a court). While the employer is holding the garnished funds, it is acting as an agent for the requesting party.
