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.