Alabama Wage Garnishment Laws: Limits, Exemptions, and the 25% Rule

Someone has a judgment against you — or you hold a judgment and want to know what you can actually collect from wages. Either way, Alabama wage garnishment follows strict mathematical rules that cap what an employer can withhold. Getting these numbers wrong causes problems for everyone involved.

The Two-Test Rule

Alabama aligns its wage garnishment limits with federal law under 15 U.S.C. § 1673 and Ala. Code § 6-10-7. Every pay period, the employer calculates the maximum garnishment using two tests and withholds the lesser amount:

• Test 1: 25% of disposable earnings
• Test 2: Disposable earnings minus 30 times the federal minimum wage ($7.25/hour)

For a weekly pay period, 30 × $7.25 = $217.50. For biweekly, double it to $435.00.

If disposable earnings fall below $217.50 per week ($435.00 biweekly), wages are 100% exempt — nothing can be garnished.

Disposable Earnings: What Counts

Disposable earnings are not the same as take-home pay. The calculation starts with gross earnings and subtracts only deductions required by law:

• Federal income tax
• State income tax
• FICA (Social Security)
• Medicare
• Mandatory retirement withholdings required by state law

Voluntary deductions do not reduce disposable earnings for garnishment purposes. That includes health insurance premiums, union dues, 401(k) contributions, and loan repayments.

A Worked Example

A debtor earns $1,600 gross biweekly. Mandatory deductions total $300.

• Disposable earnings: $1,600 − $300 = $1,300
• Test 1 (25% cap): $1,300 × 0.25 = $325.00
• Test 2 (floor cap): $1,300 − $435.00 = $865.00
• Maximum withholding: The lesser of $325 and $865 = $325.00 per biweekly period

On a $4,000 judgment, garnishment at $325 biweekly would take roughly 6 months — not counting post-judgment interest at 7.5% per year (Ala. Code § 8-8-10), which adds to the balance.

Income That's Completely Exempt

Certain income sources cannot be garnished at all under federal and Alabama law, regardless of the two-test calculation:

• Social Security benefits (including retirement and disability)
• Supplemental Security Income (SSI)
• Veterans Affairs (VA) benefits
• Railroad Retirement benefits
• Unemployment compensation
• TANF and public assistance
• ERISA-qualified retirement accounts (401(k), pension plans, IRAs under Ala. Code § 19-3B-501)

These protections apply automatically for direct-deposited federal benefits under the bank account lookback rule (31 C.F.R. Part 212), but the debtor may need to affirmatively claim exemptions for other protected income by filing a motion with the court.

The Homestead and Personal Property Exemptions

Beyond wages, Alabama protects other assets from judgment execution:

• Homestead: Up to $15,000 per individual owner ($30,000 joint) on up to 160 acres under Ala. Code § 6-10-2
• Personal property: Up to $7,500 total value in personal items, clothing, tools, and cash under Ala. Code § 6-10-6

What If You Need to Challenge a Garnishment

A debtor who believes their wages are over-garnished or exempt can file Form PS-20 (Motion to Stop Wage Garnishment) with the District Court. The creditor then has 10 calendar days to contest under Ala. Code § 6-10-26 — if they don't, the court releases the funds.

Understanding Your Full Options

Whether you're collecting a judgment or facing a garnishment, knowing the exact limits matters. The Alabama Judgment Collection Guide includes worked garnishment calculations, exemption checklists, and the complete enforcement process for every tool available in Alabama's small claims system.

See more Alabama guides →