We have received a garnishment for one of our employees. What is the correct general ledger entry to record this and pay it.

A garnishment is an instrument used to collect a debt. As an employer, you are being asked to direct funds that you owe the employee (wages) to the creditor. Depending on who the creditor is, determines how you withhold from the employee's wages.

Basically, the paperwork you received should explain how much you are to withhold from payroll. Each time you pay this person, you should subtract that amount from his payroll and remit it to the creditor. Some creditors ask that you withhold for a set time limit and remit the total that you have withheld at the end of that time limit. Other types of garnishments (child support and federal liens) mandate that the amount be sent immediately following the payroll date.

On your books you will be posting the amount that is withheld from the employee's payroll as a credit to a liability. (Garnishments Payable) Then when you issue the check in payment of the garnishment, you would post the debit to the same account. The balance should zero out after each payment.