Select this amount type for the application to calculate the garnishment payment as a percentage of the employee's gross earnings minus taxes and union dues. Taxes include federal and provincial income tax, CPP/QPP contributions, EI premiums, and QPIP premiums.
If you select this amount type, you need to enter a value in the Ordered Percent field that the application uses to calculate the garnishment amount.
When you select this amount type, the application checks for deduction elections that use a deduction code that has the following configuration, which you can verify by going to Payroll Setup > Earnings and Deductions, clicking the Deductions tab, selecting the appropriate deduction, clicking the Tax and Compliance sub-tab, and clicking the Canada tab and viewing the General section:
- Tax Type: Pre-Tax
- Tax Method: Union Dues
Other pre-tax and post-tax deductions are excluded from the calculation.
When you select this amount type, the garnishment payment takes priority over pre-tax and post-tax deductions on the payment. This means that if there is only a limited amount of pay left after tax, the amount goes to the garnishment before it goes to a deduction. This includes pre-tax deductions for union dues.
Example
Note: This example does not factor in limits or minimum subsistence rules.
In this example, you add a federal garnishment order for an Ontario employee. You select the % of Gross less Statutory Deductions and Union Dues option in the Ordered Amount Type drop-down list and enter 25 in the Ordered Percent field.
In the current pay run, the employee has the following:
- Gross earnings of $2,400
- A pre-tax deduction for union dues of $120
- Taxes (CPP, EI, and Fed Tax) of $563.01
- A post-tax deduction of $200
Dayforce subtracts tax ($563.01) and union dues ($120) from $2,400 to get $1,716.99, which is the amount it uses when calculating the garnishment percentage.
Dayforce deducts 25% of $1,716.99, or $429.25, for the garnishment in this pay run.
Additional details about garnishments for Canadian employees are available in the following topics: