Payroll - Court Orders

Employers can be made responsible for the collection of monies from individuals under orders from the Courts or certain agencies, such as the Child Support Agency. Orders may be AEO (Attachment of Earnings Orders) or DEO (Deduction of Earnings Orders). Orders can be specified with protected earnings limits, below which no deductions can be taken. Some orders carry a higher priority than others. An employer is responsible for:

Court Order Payment Patterns Available

The system allows for a number of court order payment patterns: -

Recurring Fixed Amount
is used for an absolute amount being deducted each payroll run until stopped or amended.
Reducing Balance
is used for an absolute amount being deducted each payroll run until a balance outstanding has been reduced to zero.
Recurring Fixed Percentage
is applied to the net pay and the computed value deducted each payroll run until stopped or amended. The net pay is the gross pay in the period less the usual deductions of PAYE, Employee NIC, Pension and any other court orders of higher priority.
Standard Council Tax Percentage
is used to apply a standard table of deductions (see below)
Direct Earnings Attachment Percentage
is used to apply a standard table of deductions (see below)

Standard Council Tax Percentage

Deductions from weekly earnings
Threshold Percentage
Not exceeding £75 0.0%
Exceeding £75 less than £135 3.0%
Exceeding £135 less than £185 5.0%
Exceeding £185 less than £225 7.0%
Exceeding £225 less than £355 12.0%
Exceeding £355 less than £505 17.0%
Exceeding £505 17.0% for first £505 then 50%

For two weekly pay period the system will use the weekly table multiplied by two

Deductions from Net monthly and four weekly earnings
Threshold Percentage
Not exceeding £300 0.0%
Exceeding £300 less than £550 3.0%
Exceeding £550 less than £740 5.0%
Exceeding £740 less than £900 7.0%
Exceeding £900 less than £1420 12.0%
Exceeding £1420 less than £2020 17.0%
Exceeding £2020 17.0% for first £2020 then 50%

Direct Earnings Attachment Percentage - Standard Rate

Deductions from weekly earnings
Threshold Percentage
Not exceeding £100 0.0%
Exceeding £100 less than £160 3.0%
Exceeding £160 less than £220 5.0%
Exceeding £220 less than £270 7.0%
Exceeding £270 less than £375 11.0%
Exceeding £375 less than £520 15.0%
Exceeding £520 20.0%
Deductions from monthly earnings
Threshold Percentage
Not exceeding £430 0.0%
Exceeding £430 less than £690 3.0%
Exceeding £690 less than £950 5.0%
Exceeding £950 less than £1160 7.0%
Exceeding £1160 less than £1615 11.0%
Exceeding £1615 less than £2240 15.0%
Exceeding £2240 20.0%

Direct Earnings Attachment Percentage - Higher Rate

Deductions from weekly earnings
Threshold Percentage
Not exceeding £100 5.0%
Exceeding £100 less than £160 6.0%
Exceeding £160 less than £220 5.0%
Exceeding £220 less than £270 14.0%
Exceeding £270 less than £375 22.0%
Exceeding £375 less than £520 30.0%
Exceeding £520 40.0%
Deductions from monthly earnings
Threshold Percentage
Not exceeding £430 5.0%
Exceeding £430 less than £690 6.0%
Exceeding £690 less than £950 10.0%
Exceeding £950 less than £1160 14.0%
Exceeding £1160 less than £1615 22.0%
Exceeding £1615 less than £2240 30.0%
Exceeding £2240 40.0%

Setting up a Court Order

You will receive notification from the Court or Agency specifying when to start deductions and how much. You only stop deducting when told to in writing or the debt for which the order was raised is paid off.

Court Orders are entered in the Payroll/Tax details for an employee, accessed via the Payroll menu.

Payroll - Manage Employees - Action Box - Court Orders

A maintenance screen is displayed in which details from the court order are entered. Enter a unique name and description for the court order in the Court Order Name field. Select the payment pattern from the dropdown box.

From the Account dropdown select the nominal ledger account in which the deduction is held until paid to the Court or Agency. Enter the Amount either as an amount or percentage depending on the pattern selected above. Note that for Standard Council Tax and Direct Earnings Attachment Percentage the field should be blank.

Tick the Protected Deduction box if there is a protected earnings portion, which allows the employee to keep a minimum level of net earnings. If there is a protected net pay portion, enter the amount of protected pay for the relevant pay interval. If there is one or more orders and they are subject to protection, the details will need to be entered for each order not just the first.

Enter a number representing the order of priority in the event of multiple court orders. '1' will be deducted before '2' etc. Carry Forward Balance displays the balance of any shortfall in deductions, due to protected pay levels, and which will be caught up in future pay runs. You cannot enter anything in this field.

Enter a Starting Balance if the payment pattern is reducing balance. Enter any amount that has already been paid to date by the employee. As deductions are made at each payroll run, this figure will be updated and display the total amounts deducted to-date. Enter the balance to pay as the amount still to be paid off the debt. Usually this is starting balance less paid to date. As deductions are made at each payroll run, this figure will be updated and display the balance still to pay.

Enter the date of the court order. Enter the reference associated with this court order.

Calculation of the amount of the deduction

The system automatically records the correct amount of deduction, from the next payroll run after the start date. All reports reflect the deduction appropriately. The protected pay element works as shown in this example.

Deductions from monthly earnings
Period 1 Period 2
Gross Pay 227.5 483.75
PAYE/NIC -57.13 -125.14
Net Pay 220.23 358.61
Protected Pay Level 180.00 180.00
Available for deduction 40.37 178.61
Order Deduction -56.00 -56.00
Restricted to -40.37
Carried Forward 15.63 -15.63
Total Deducted -40.37 -71.63

When the payroll has been finalised make sure that the monies deducted are paid to the court or agency as instructed.


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