Garnishment of wages and compensation

What is wage garnishment?

Wage garnishment is the technique by which a worker is allowed to withhold part of his or her wages and other emoluments in order to comply with enforceable orders from the worker’s creditors.

What are the limits to the unattachability of wages?

The minimum interprofessional wage (SMI) is the minimum amount that is considered to be unattachable, in its entirety. Therefore, all salary payments received above this minimum amount can be subject to seizure.

The limits of the unattachability of wages are established in the Civil Procedure Act (LEC art.607), according to the following scale:

Embargables	Percepcions Percentatges
Up to ins to 1 SMI	–
From 1 a 2 SMI	30%
From 2 a 3 SMI	50%
From 3 a 5 SMI	60%
From 4 a 5 SMI	75%
More than 5 SMI	90%

Monthly salary or wage

The seizure is made on the net or liquid salary, that is to say, on the amount that results after deducting the corresponding income tax withholding and the Social Security contribution. This amount is subject to the limits of unattachability of the SMI of art. 607 of the LEC.

Furthermore, it should be borne in mind that these limits do not apply to the money held in the bank account, regardless of its origin and provenance (SC act 26-9-19, EDJ 695285).

Extraordinary payments

It is considered that salaries can be subject to seizure. However, as a novelty, the TEAC has unified criteria with regard to how to determine the limit of unattachability and distinguish two situations (TEAC Ressol. 17-5-22, EDD 17214):

1. When the worker receives, at the cost of the ordinary monthly payment, a bonus or extraordinary payment: the limit of unattachability will be constituted by double the monthly SMI and the excess will be applied to the scale set out in art. 607 of the LEC.

2. When it is received pro rata: the limit is constituted by the amount of the SMI in annual amount (monthly SMI x 14 payments) pro rata between 12 months. The scale of art. 607 of the LEC is applied to the excess.

Per diems, expenses and other non-wage items

They are also attachable. Their special feature is that, if they do not have a natural salary, they can be seized in their entirety. The limits of unattachability of the SMI are not applicable, however the general tax provisions on attachment of goods and rights are applicable (DGT CV 2-8-11, EDD 304681; AP Lleó 29-9-17, EDJ 226127).

Compensation for temporary accommodation or termination of temporary contracts

They do not have the status of salary for the purposes of seizure, however they are considered as “other emoluments” by the different courts and by the Directorate General of Taxes (DGT). Therefore, they can be subject to seizure at 100% of their amount (DGT CV 9-4-19, EDD 614261; DGT CV 11-5-16, EDD 95417; TSJ Madrid 20-9-19, EDJ 718422).

TI benefit

As it is a substitute for salary, it can be subject to seizure with application of the limits of unattachability of the SMI (TSJ País Vasco 3-5-16, EDJ 131883).

How is the embarkation of a part-time worker, or a worker who has a reduced working day or whose contract ends at the end of the month, carried out?

In all these cases, the reference to the monthly SMI fixed as a limit to the unattachability must be applied in full, and not in proportion to the type of working day – part-time or reduced – or to the days of the month in which the salary is reported (DGT CV 14-9-20, EDD 708502; DGT CV 4-12-18, EDD 133580; DGT CV 22-2-18, EDD 24621).

Therefore, in the attachment of wages, it must be taken into account that the SMI is unattachable in its entirety, regardless of whether the worker provides full or part-time services or the entire month.

If there are several garnishment orders, what order should be followed and what amount can be garnished?

In the event of successive or simultaneous embargos from different bodies, the criterion of the courts and the DGT is as follows (DGT CV 2-2-18, EDD 24371; TSJ Astúries 8-1-18, EDJ 7731; TSJ Sevilla 18-10-17, EDJ 251348):

• attend to garnishments in the order in which they are entered, from the oldest to the most recent, as the case may be, complying with the requirements;

• the limit of unattachability of the SMI applies, as it cannot be exceeded when there are simultaneous attachments;

• as an exception, when the attachment corresponds to a maintenance debt, the attachment limit of the SMI can be exceeded. In these cases, the court sets the amount that can be seized (LEC art.608; TSJ Astúries 17-7-18, EDJ 566692).

How should the employer reflect the wage garnishment in the employee’s paycheck?

The wage garnishment appears on the pay slip as a deduction that is subtracted from the net amount to be received by the worker.

For example: worker with a gross salary of €2,000/month in 14 annual payments. After the corresponding deductions for social security contributions and personal income tax withholding, his net monthly salary is €1,539.23. You inform the company in 2022 that you have to pay the worker €1,500 in salary deductions.

The calculation would be as follows:

• the first €1,000 is unattachable (SMI for 2022);

• of the second SMI (another 1.000 € net salary), sent your net salary 1.539,23 € and broken down the first 1.000 €, left 539,23 €. To this amount, 30% is applied and the amount to be garnished is €161.77.

Thus, the net amount to be received by the worker will be €1,539.23 – 161.77 = €1,377.46.

In the pay slip

• 161.77 will appear on the pay slip as a deduction for the salary deduction;

• the contribution and the IRPF deduction is made on the gross amount of 2.000 €;

• the net or liquid salary to be received by the worker will include 377.46 €.

In the following months, the same calculations will be made, until the sum of the deduction reaches €1,500.

Has the company informed the TGSS of the garnishment when making the contribution?

Wage garnishments are not reported in the CRA axis, as only gross amounts are included and these garnishments are made on net/liquid salary.

If you have any doubts regarding this issue, please do not hesitate to contact us, by telephone to Isabel Torre Carazo or by email to itc@btsasociados.com, we will be delighted to help you.