## Understanding Canadian Wage Attachments

This chapter provides an overview of Canadian wage attachments and discusses some example calculations.

### Canadian Wage Attachments

Each province and territory in Canada has its own legislation governing garnishments and support orders. The legislation requires all employers to comply with garnishment and support or maintenance orders. In most jurisdictions, compliance involves deducting the amount or percentage set out in the order and remitting it to the proper authority within a specified period of time.

For the protection of the debtor, every province has a law that specifies either a percentage of the employee's wages or a minimum amount that cannot be garnished. The various methods of calculating this exemption amount can be defined in the Wage Attachment application (P07107).

When you set up the exemption rules on the Wage Attachment application, you can also specify a minimum and maximum exemption amount. The minimum exemption amount is the minimum amount of pay that is exempt from the garnishment or child support, even when the exemption is calculated to a lower amount. The maximum exemption amount is the maximum amount of pay that is exempt from the garnishment or child support even when the exemption is calculated to a higher amount. You cannot specify a minimum or maximum exemption amount if you are using Exemption Method 1, but it can be used for all other methods. When you enter a minimum or maximum exemption amount, the system calculated the exemption first, then applies the minimum or maximum amount that you specify. These amounts are dictated by local governing authorities on the order for the garnishment.

You can calculate exemptions using any of these methods:

- Flat dollar

- Percent

- Table method

  - E1: Single exemption range - $.

  - E2: Single exemption range - %.

  - E3: Progressive exemption range - %.

To accommodate the exemption amount calculations from the various provinces, two types of exemption tables can be defined. The first type of exemption table, a single range table (E1 or E2), calculates the exemption by determining the range in which the employee's wages fall. Based on the range in which the employee's wages fall, the exemption amount can be calculated using either a percentage amount or a flat dollar amount.

The second type of exemption table, a progressive table (E3), calculates the exemption amount for each row in which the employee's wages exceed the upper limit or fall within the upper and lower limits. Each row is calculated progressively and the sum of all rows equals the exemption amount.

See Setting Up Tables for Wage Attachments, Entering Wage Attachments for Employees.

Example: Exemption Rules Calculations

Suppose the employer receives a child support order for an employee who lives in Quebec. The child support order is in the amount of 500.00 CAD per month. The employee's monthly disposable wage equals 1,200.00 CAD. The system calculates the exemption amount as follows:

1. Flat dollar calculation.

   If you use the flat dollar calculation and specify an amount of 1,000.00 , the system subtracts the 1,000.00 exemption from the 1,200 disposable wage and calculates the payment amount on the child support order as 200.00.

2. Percent calculation.

   If you use the percent calculation and specify 50 percent, the exemption amount is 50 percent of 1,200.00 or 600.00. The system subtracts the 600.00 exemption from the 1,200.00 disposable wage and calculates the payment amount on the child support order as 600.00.

3. Table method calculation - E1.

   If you use the table method calculation and specify a single exemption range - $, you might set up ranges as shown in this table:

   Lower Limit | Upper Limit | Amt./Rate
   0.00 | 499.99 | 200.00
   500.00 | 999.99 | 400.00
   1,000 | 1499.99 | 600.00
   1,500 | 1,999.99 | 800.00

   The employee's disposable wage falls within the 1,000-1,499.99 range, so the exemption amount is 600.00. The system subtracts the 600.00 exemption from the 1,200.00 disposable wage and calculates the payment amount on the child support order as 600.00.

4. Table method calculation - E2.

   If you use the table method calculation and specify a single exemption range - %, you might set up ranges as shown in this table:

   Lower Limit | Upper Limit | Amt./Rate
   0.00 | 499.99 | 50.00
   500.00 | 999.99 | 40.00
   1,000 | 1499.99 | 30.00
   1,500 | 1,999.99 | 20.00

   The employee's disposable wage falls within the 1,000-1,499.99 range, so the exemption amount is 30 percent of 1,200.00 or 360.00. The system subtracts the 360.00 exemption from the 1,200.00 disposable wage and calculates the payment amount on the child support order as 840.00.

5. Table method calculation - E3.

   If you use the table method calculation and specify a progressive exemption range - %, you might set up ranges as shown in this table:

   Lower Limit | Upper Limit | Amt./Rate
   0.00 | 499.99 | 50.00
   500.00 | 999.99 | 40.00
   1,000 | 1,499.99 | 30.00
   1,500 | 1,999.99 | 20.00

   The system calculates a 50 percent exemption on the first 499.99 of the employee's disposable wage for an amount of 250.00; a 40 percent exemption on the disposable wage between 500.00 and 999.99 for an amount of 400.00; and a 30 percent exemption on the disposable wage between 1,000.00 and 1,499.99 (which in this case is 200.00) for an amount of 60.00. The system then adds these exemption amounts (200.00 + 400.00 + 60.00) for a total exemption amount of 660.00, subtracts the 660.00 exemption from the 1,200.00 disposable wage, and calculates the payment amount on the child support order as 540.00.