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Electronic Garnishment Payments

Overview

ProPay supports paying garnishments and other deductions electronically through ACH (Automated Clearing House) transfers. This eliminates the need to print and mail paper checks to garnishment agencies, child support State Disbursement Units (SDUs), and other payees.

Payment Methods

When setting up a deduction payee, ProPay offers two payment methods:

  • Pay by Check -- ProPay prints a check to the payee agency
  • Pay Electronically -- ProPay includes the payment in the ACH file for electronic transfer

Supported Deduction Types

ProPay supports electronic payments for these deduction categories:

Deduction Type NACHA Addenda Code Common Uses
Child Support Payment DED Court-ordered child support sent to SDUs
Third Party Payment TPP Tax levies, creditor garnishments, other agency payments
Tax Payment -- Federal and state tax deposits
Other -- Voluntary deductions, loan repayments

Set Up Electronic Garnishment Payments

Step 1: Access the Employee's Deductions

  1. From the Payroll Main Menu, go to Employees.
  2. Select the employee and click Change.
  3. Click Deductions to view the employee's deduction list.

Step 2: Set Up or Edit the Payee

  1. Click the deduction that requires electronic payment.
  2. In the Payee Setup screen, set the Pay Method to Pay Electronically.
  3. Select the appropriate Deduction Type (Child Support Payment, Third Party Payment, Tax Payment, or Other).

Step 3: Complete Electronic Payment Fields

For child support payments sent to a State Disbursement Unit (SDU), complete these additional fields:

Field Description
Application Identifier Enter CS for Child Support
Case Identifier The IV-D case number or court order number assigned by the receiving SDU
SSN Non-custodial parent's Social Security number
Medical Support Indicator Y (employer offers family medical coverage), N (no coverage), or W (not applicable)
FIPS Code Federal Information Process Standard code of the receiving SDU (5 or 7 characters)

Important: The SDU must provide the employer with the correct Case Identifier before the first electronic payment is sent.

Step 4: Process Payroll

  1. Process payroll normally.
  2. When you generate the ACH file, ProPay includes electronic garnishment payments along with employee direct deposits.
  3. The ACH file contains the appropriate NACHA addenda records (DED for child support, TPP for third-party payments) so receiving agencies can properly credit each payment.

When to Use Check Payments Instead

Some situations still require payment by check:

  • The garnishing agency does not accept electronic payments
  • The agency has not provided the required electronic payment identifiers
  • Your bank or ACH processor does not support addenda records
  • You prefer to maintain a paper trail for certain payments

To pay by check, set the Pay Method to Pay by Check in the Payee Setup screen. ProPay prints garnishment checks when you run Paychecks > Print Checks from the Payroll Main Menu.

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