ADP Garnishments and Deductions 2

Question 1

In ADP Workforce Now, where would a payroll specialist typically set up a new employee wage garnishment?

Accepted Answer

Payroll > Deductions & Benefits > Garnishments

Answer

In ADP Workforce Now, garnishments are set up under the Payroll module in the Deductions & Benefits section where the garnishment type, amount, and priority are configured.

Question 2

Which type of deduction is classified as a 'pre-tax' deduction that reduces an employee's federal taxable wages?

Accepted Answer

Section 125 cafeteria plan contribution

Answer

Section 125 cafeteria plan contributions (such as health insurance premiums paid through a cafeteria plan) reduce federal taxable wages and are considered pre-tax deductions.

Question 3

What is a 'Creditor Garnishment' also commonly referred to as in payroll?

Accepted Answer

Income execution

Answer

A creditor garnishment is also called an income execution, which is a court order directing an employer to withhold a portion of an employee's wages to pay a debt owed to a creditor.

Question 4

How should a payroll specialist handle an employee who voluntarily requests a deduction for a personal loan repayment to their employer?

Accepted Answer

Set it up as a voluntary deduction coded appropriately in ADP

Answer

Employer loan repayments are voluntary deductions that should be set up as a specific deduction code in ADP's payroll system, subject to applicable state wage assignment laws.

Question 5

What is the typical employer administrative fee that states may allow for processing a wage garnishment?

Accepted Answer

$1 to $5 per payment

Answer

Many states permit employers to charge a small administrative fee, typically $1 to $5 per garnishment payment, to offset the cost of processing the order.

ADP - ADP Certified Payroll Specialist Practice Test

ADP - ADP Certified Payroll Specialist Practice Test

ADP Garnishments and Deductions 2