What is meant by wage garnishment?

Wage garnishment is defined as a means of enforcement by which a creditor deducts money in the hands of an employer for the sums owed to him by the employee who does not honour his financial commitments (e.g. repayment of a loan).

What part of a person’s salary can be garnished?

For the purpose of garnishment, wages are divided into five brackets by a Grand-Ducal regulation fixing the rates of assignment and garnishment of work-related wagesA garnishment rate is fixed for each instalment, as shown in the table below.

Instalment Monthly limit Percentage eligible
for garnishment
1 up to €850 cannot be garnished
2 from €850 to €1,300 10%
3 from €1,300 to €1,600 20%
4 from €1,600 to €2,600 25%
5 above €2,600 no limit

(last updated on 03.04.2023)

Is garnishment carried out on gross or net pay?

In determining the part to be garnished, the employee’s social security contributions and taxes are deducted from the pay. Therefore, an employee’s net remuneration is used.

What happens if several garnishment actions are carried out on a single pay source?

It may happen that more than one garnishment is applied to a like salary. In this case, the judge sums up the total of the amounts to be paid and each creditor is paid in proportion to what is owed them.

Example :

Mr A.’s salary underwent three garnishments, amounting to €3,000 net:

  • garnishment 1 : €2,000
  • garnishment 2 : €2,000
  • garnishment 3 : €6,000

The monthly amount that can be deducted from Mr A’s salary is:

45 + 60 + 250 + 400 = €755

(last updated on 03.04.2023)

The total sum of the garnishment is €10,000. Garnishment 1 of €2,000 is 2/10 of this amount, garnishment 2 of €2,000 is 2/10 and garnishment 3 of €6,000 is 6/10.

The amount of €1,025.4 is therefore distributed over the various garnishments as follows:

  • garnishment 1 : 2/10 of €755= €151
  • garnishment 2 : 2/10 of €755= €151
  • garnishment 3 : 6/10 of €755= €453

These amounts are withheld each month until the attachments are paid in full.

How is the garnishing of wages carried out in the case of a maintenance claim?

If the amount owed by the employee is a maintenance claim, the current monthly amount of this claim is deducted each month from the portion of the salary that cannot be garnished.

What is the difference between a garnishment of earnings and an assignment of earnings?

The garnishment of wages is not to be confused with the assignment of wages, whereby an employee voluntarily assigns to a creditor the transferable part of his wages as security for commitments undertaken (e.g. in return for granting of a loan).

Garnishment and assignment differ both in their character and in the procedure to be followed.

Garnishment is a compulsory deduction of wages which results from a court order, whereas assignment is a voluntary deduction of wages by the employee which becomes enforceable upon notification of the assignment by registered letter to the employer.