Disposable Earnings Definition

The portion of employee income that is available to spend as they choose, after payment of taxes or other legally mandated deductions from gross income.

Disposable Earnings Extended Definition
An employee’s disposable earnings is the income remaining after legally mandated deductions have been made, including Social Security, federal tax, state tax, and state disability insurance. The deductions that do not qualify are 401(k) contributions and other employee-saving plans, life insurance, and medical insurance.

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Last Updated By

Jenna Hutkowski | Apr 13, 2023