Wisconsin Department of Children and Families

Protecting Children, Strengthening Families, Building Communities

 

 

Examples for Calculating Income Withholding

*For all examples below:

Gross income means: All income and earnings from all sources. Gross income may or may not be taxable and can be in the form of money, property, or services.

Disposable income means: The part of earnings that remains after deducting federal, state, and local withholding taxes, and Social Security/Medicare taxes.

Calculating withholding amounts for two states within CCPA limits when both notices are for fixed-dollar amounts.

Scenario:

  • Wisconsin notice is for $200 per month
  • Minnesota notice is for $350 per month
  • Employee's gross income is $900 per month
  • Employee's CCPA limit is 55% of disposable income
  • Disposable income is $750 per month

Calculation:

  • Employee's CCPA limit is 55% of disposable income: 55% x $750 = $412.50
  • Total amount due per notice: $550 ($200 + $350) is above the CCPA limits
  • WI notice is 36% of total ($200 / $550)
  • MN notice is 64% of total ($350 / $550)
  • Prorated amount for WI notice: 36% of $412.50 = $148.50
  • Prorated amount for MN notice: 64% of $412.50 - $264.00
  • Withhold $148.50 and remit to Wisconsin
  • Withhold $264.00 and remit to Minnesota

Calculating withholding amounts within CCPA limits for a fixed-dollar amount and a withholding for R&D Fees.

Scenario:

  • Income withholding notice: $100 per bi-weekly pay period
  • R&D withholding: $35
  • Total amount: $135 for the bi-weekly paycheck
  • Employee's CCPA limit is 60% of disposable income
  • Gross income for biweekly pay period is $250
  • Disposable income is $205

Calculation:

  • Employee's CCPA limit is 60% of disposable income: 60% x $205 = $123
  • Compare withholdings to CCPA limits:
    • Income withholding notice: $100 (below the CCPA limit)
    • With R&D withholding: $135 (above the CCPA limit)
  • Prorate the R&D fee within CCPA limit
    • $123 - $100 = $23 R&D withholding
  • Withhold $23 for the R&D fee

Calculating withholding amounts for child support, insurance premiums, and past-due support within CCPA limits and withholding priorities.

Scenario:

  • Income withholding notice for pay period totals: $275:
    • $150 for current support
    • $50 for health care premium
    • $75 for past-due support
  • Gross income is $500
  • Disposable income is $420
  • CCPA limit is 55%

Calculation:

  • CCPA limit is $231 (55% x $420)
  • Withhold:(up to CCPA limit)
    • Full $150 for current support
    • Full $50 for health care premium
    • Only $31 for past-due support