Wage Assignment

Taxes aren’t the only thing that can be taken out of your wage. A wage assignment is when money is taken out of a worker’s paycheck to pay back some sort of debt. Debt like back taxes and child support payments can be automatically withheld from your paycheck via wage assignment. You can also opt into wage assignment to save up for things like retirement, or to pay regular union dues.

If you have a wage assignment, hopefully it’s been agreed upon between you and your employer, but that doesn’t have to be the case...wage assignment can be an involuntary arrangement. When a wage assignment is involuntary, it’s probably because a judge made it happen via a court order, which they call “wage garnishment.”

For lenders, wage assignment is a way to get bad borrowers (you know, the ones who aren’t making payments) to pay what they said they would.