Wage Garnishment in Ontario

As mentioned in previous blogs I’m sure, Garnishments are Court Orders that are obtained by a Creditor after judgment is awarded, where the Court orders a party (the Garnishee) to pay the Creditor the amount provided in the Notice of Garnishment.

How much is garnished at a time depends upon who the Garnishee is.

When the Garnishee is a bank, 100% of the money in the account(s) held at the branch is garnished up to the amount of the Garnishment.  If the account(s) do not have enough funds to cover the full amount of the Garnishment, the account(s) are frozen until there is. 

Money owed to a debtor through work is different.

It must be determined whether a debtor is an employee or an Independent Contractor of the Garnishee.

If a debtor is an employee of the Garnishee, then 20% of their net wages (after taxes) is garnished as the funds become due to the debtor until the amount provided in the Notice of Garnishment is either:

(1) paid in full;
(2) the debtor is no longer employed by the Garnishee;
(3) the debtor pays the amount of the Garnishment in full themselves; or  
(4) the debtor goes bankrupt. 

The above amount does apply to an Order for either child or spousal support.  Up to 50% of a debtor’s net wages can be garnished for support.

However, if the debtor is an independent contractor of the Garnishee, 100% of the amount(s) owed to the debtor by the Garnishee is garnished.

Independent contractors who are essentially self-employed individuals do not have the protections an employee has.

If you are served with a Notice of Garnishment, knowing whether the debtor is an employee or independent contractor is important to determine how much to submit to the Court.  If the wrong amount(s) are submitted, you may be on the hook if the debtor’s circumstances change.

Murray Brown, Licensed Paralegal