Arizona Wage Garnishment Rules: Employer Compliance Checklist (2025 Guide)

Wage garnishment is a legal process that requires Arizona employers to withhold part of an employee’s paycheck and send it to a creditor, court, or agency. For businesses, this isn’t optional—employers have strict deadlines and responsibilities, and failing to comply can lead to costly liability.

With the passage of Proposition 209, Arizona now has some of the most protective garnishment limits in the country, capping most orders at just 10% of disposable earnings. That makes it critical for employers to understand the updated rules, calculate properly, and follow each step of the compliance process.

This guide breaks down Arizona wage garnishment rules and provides an employer compliance checklist to help you manage orders accurately, protect your business, and stay compliant in 2025.

Why wage garnishment compliance matters for Arizona employers

When an employee’s wages are subject to garnishment, Arizona employers become the middle link between the courts, creditors, and the worker. A missed step or late response can make the employer liable for the full debt. Understanding Arizona’s garnishment rules is essential for accurate payroll processing and risk management.

This guide explains Arizona wage garnishment laws, employer obligations under Proposition 209, and provides a step-by-step compliance checklist.

What is wage garnishment?

Wage garnishment is a legal process where a portion of an employee’s disposable earnings is withheld and sent to a creditor, court, or government agency.

Disposable earnings = wages left after legally required deductions such as federal and state income taxes, Social Security, and Medicare.

Arizona wage garnishment limits (updated by Prop 209)

Under federal law, garnishment is usually capped at 25% of disposable earnings or the amount above 30× the federal minimum wage (whichever is less).

Arizona Proposition 209 (effective December 2022) reduced the state limit:

• Maximum of 10% of disposable earnings, or
• Amount above 60× the minimum wage (whichever is less).

📊 Example:

• Disposable earnings = $800 per week.
• Federal cap = $200 (25%).
• Arizona Prop 209 cap = $80 (10%).
  ➡ Arizona law is more protective, so the garnishment is limited to $80.

Special rules:

• Child support and alimony: up to 50–65% of disposable earnings.
• Federal taxes and student loans: may exceed state caps.

For business owners who also manage debt repayment, tools like the land loan repayment schedule calculator can help balance cash flow when payroll deductions tighten margins.

Employer responsibilities in Arizona

1. Upon receiving a garnishment order

• Verify the order is issued by a court or agency.
• File an Answer within 10 business days confirming employment status, pay rate, and any existing garnishments.
• Notify the employee promptly.

2. Withholding wages

• Calculate disposable earnings.
• Apply Arizona limits (10% or 60× minimum wage test).
• Prioritize correctly if multiple orders exist.

3. Remitting payments

• Send withheld amounts to the court or agency named in the order.
• Remit according to the schedule in the order (often each pay period).
• Keep confirmation of payments.

4. Recordkeeping

• Maintain copies of orders, calculations, and remittances for at least 4 years.
• Document communication with the employee.

Employers balancing garnishments, payroll taxes, and property costs may also benefit from the property tax calculator to project fixed expenses.

Employer compliance checklist

✅ Review garnishment order for validity.
✅ File Answer with the court/agency within 10 business days.
✅ Notify the employee of the garnishment.
✅ Calculate disposable earnings.
✅ Apply Arizona’s Prop 209 limits (10% or min wage multiplier).
✅ Withhold from the next paycheck.
✅ Remit withheld wages to the court/agency.
✅ Track all payments and keep records.
✅ Adjust or stop withholding when the order is satisfied or released.

Priority of garnishments in Arizona

When multiple orders exist:

1. Child support and alimony take priority.
2. Federal taxes follow.
3. Consumer debts (credit cards, medical bills) come last.

If total garnishments would exceed Arizona’s cap, apply priority rules first.

Penalties for employer noncompliance

• Failure to respond: employer may be liable for the employee’s full debt.
• Late or incorrect withholding: subject to fines, court sanctions, or repayment.
• Over-withholding under Prop 209: employer must refund the excess.

If your business is considering accelerating payments to stay ahead of debt, the early payoff calculator can model how faster repayment affects cash reserves.

FAQs: Arizona wage garnishment compliance

How much can be garnished from wages in Arizona?
Up to 10% of disposable earnings or the amount above 60× minimum wage, whichever is less.

Does Prop 209 change employer duties?
Yes. Employers must now calculate using the stricter 10% cap and correct over-withholding.

How quickly must employers act on a garnishment order?
You must file an Answer within 10 business days and start withholding with the next payroll.

Can employers charge a processing fee in Arizona?
No. Arizona law does not allow employers to deduct administrative fees from the employee’s wages.

What happens if an employee leaves the company?
You must file a termination Answer with the court and stop withholding.