Colorado Garnishment Exempt Earnings: How Much of a Paycheck Is Protected?

Colorado protects a larger share of a debtor's paycheck from garnishment than federal law requires. Whether you're the creditor calculating expected recovery or the person whose wages are being garnished, understanding the exemption formula tells you exactly how much is at stake.

The Two-Prong Calculation

Under C.R.S. § 13-54-104, the maximum amount an employer can withhold is the lesser of:

1. 20% of weekly disposable earnings
2. The amount by which weekly disposable earnings exceed 40 times the Colorado minimum wage

"Disposable earnings" means gross pay minus mandatory deductions — federal and state income tax, FICA, and Medicare. Voluntary deductions like retirement contributions, health insurance, or union dues stay in the calculation. They don't reduce the garnishable amount.

2026 Numbers

Colorado's minimum wage for 2026 is $15.16/hour, making the weekly exemption floor:

• Weekly: $606.40 (40 × $15.16)
• Biweekly: $1,212.80
• Semimonthly: $1,313.87
• Monthly: $2,627.73

If the debtor's weekly disposable earnings fall below $606.40, their entire paycheck is exempt — nothing gets garnished.

Three Examples

Debtor earns $700/week disposable:

• 20% cap: $140.00
• Amount over $606.40: $93.60
• Employer withholds the lesser: $93.60

Debtor earns $1,000/week disposable:

• 20% cap: $200.00
• Amount over $606.40: $393.60
• Employer withholds the lesser: $200.00

Debtor earns $550/week disposable:

• 20% cap: $110.00
• Amount over $606.40: $0 (below the floor)
• Employer withholds the lesser: $0.00 — fully exempt

Form 27 and Form 28

Form 27 (Calculation of the Amount of Exempt Earnings) is where the employer works out the withholding math. It goes to the debtor along with the Writ of Continuing Garnishment (Form 26).

If the debtor believes the calculation is wrong — maybe the employer included the wrong pay period or miscounted deductions — they file Form 28 (Objection to Calculation of the Amount of Exempt Earnings) within 7 days of receiving the pay-period calculation. Filing Form 28 pauses all disbursements and triggers a court hearing within 14 days.

Bank Account Exemptions Are Different

The wage garnishment formula above applies only to earnings. Bank account levies (Form 29) use a separate exemption: Colorado law allows an exemption of up to $2,500 in cumulative funds held in financial institution accounts under C.R.S. § 13-54-102(1)(w). Federal benefits like Social Security, SSI, and VA payments deposited in the last two months get additional automatic protection — the bank must shield those funds without the debtor filing anything.

If a bank levy is involved, the debtor uses Form 30 (Claim of Exemption) instead of Form 28 to challenge the seizure.

What This Means for Creditors

Run the numbers before filing for garnishment. If the debtor's income is near the exemption floor, you may recover very little per pay period — possibly not enough to justify the filing fees and process server costs within the 182-day writ period.

For higher-earning debtors, wage garnishment is typically the most efficient collection tool. The Colorado Judgment Collection Guide includes the full garnishment calculation worksheet along with the exemption thresholds for every enforcement tool.

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