Your software makes it easy to process AEOs, by calculating the deduction automatically. If you need to reconcile a calculation follow each section below.

Attachable pay

The first step is to check the employee's attachable pay, which is the amount of their pay that's subject to AEO deductions.

Pay element configuration

Your software allows you to configure which pay elements are included in attachable pay. Also, there are three separate options to set which types of attachments that the payment is calculated against.

To check or amend these settings on a payment:

1. Click Company, then Pay Elements.
2. Select the pay element to check/change, then click Edit.
3. On the following options, select the checkbox to include the payment in the calculation of that AEO, or clear it to exclude it:
   1. Community charge - this sets whether the payment is attachable in the Pre 92 Community Charge and Post 92 Community Charge AEOs.
   2. Council Tax - this sets whether the payment is attachable in calculations for the Council Tax AEO.
   3. Other Attachments - this sets whether the payment is attachable for all other AEOs.

If you're not certain which payments you should set as attachable, contact the authority that issued the attachment for advice.

Attachable pay

This is the total of any payments configured to be subject to the AEO being processed as above, less any PAYE and employee National Insurance. View an example >

You can check this with either a pre update or post update report.

Pre update report

1. Select the employee on your employee list.
2. Click Payroll, then Pre-update Reports.
3. Click the Summary category on the left.
4. Run the Attachment of earnings report.

Post update report

1. Select the employee then click Reports.
2. Click the Employee category then run the Attachment History report for the relevant period.

Protected earnings

Some attachments protect an amount of the employee's net pay from AEO deductions. Most often, this is set at 60% of net pay being protected. Some attachments automatically include protected earnings, you can check this in your software:

1. Click Company then the Legislation tab,
2. Click the AEO Rates tab.
3. Click the drop-down box beside Attachment Type, and select the attachment you'd like to check.
4. Check the box to the right of Protected Earnings % to view for any value applied.

In some cases, the authority that issues the AEO may ask you to apply an amount of protected earnings to an attachment. You can set this in the employee record >

Deduction rate

Some AEOs require that you deduct a set amount each period, while others deduct a percentage based on attachable pay.

In an AEO with a set deduction amount, the letter that asks you to apply the deduction should specify this amount. In this case, your software deducts the amount you specify from the employee's attachable pay when you set up the AEO.

AEOs that deduct a percentage of attachable pay are already set up with the correct rates in your software. If you'd like to check these rates you can use your software:

1. Click Company then the Legislation tab,
2. Click the AEO Rates tab.
3. Click the drop-down box beside Attachment Type, and select the attachment you'd like to check.
4. If the attachment uses percentages, tables appear below listing the weekly and monthly deduction rates.
    NOTE: If your employee is fortnightly paid, double the attachable from and to values to check which band they fall in. For four weekly, quadruple these values. You don't need to double or quadruple the deduction rate.

The calculation

Your software calculates attachable pay, then calculates the required deduction for the AEO. It then checks if this can be deducted without taking the employee below any protected earnings applied to this AEO.

If the full deduction can be taken without affecting protected earnings, it's deducted. If it would affect protected earnings, your software deducts what it can without affecting protected earnings.

If the attachment uses carried forward values, it then adds the rest of the deduction to the carried forward value to deduct, when possible, in a future pay period. You can find out more about carried forward values and which AEOs this applies to in the Set amount deduction section below.

Set amount deduction

When the AEO deducts a set amount, your software deducts this from the attachable pay.

Some attachments use carried forward (c/f) values, and some don't. You can check which AEOs use c/f values by clicking the required region in the AEO tables section of our Attachment of earnings orders in England and Wales guide. 

When c/f values are applied, if the attachable pay isn't sufficient to cover the whole deduction in a pay period, any amount that can't be deducted is kept track of in the attachment carried forward field. This is then deducted in a future period on top of the normal deduction, where attachable pay allows. You can view any c/f values in the employee's record >

Deduction based on a percentage

When an AEO uses percentages, there's a range of deduction percentages that increase the higher the attachable earnings are. In most cases, only one deduction percentage is used in the calculation, based on which thresholds the attachable pay is within.

However, an exception is the Earnings arrestment AEO, which calculates the deduction due in each threshold and totals them. When applied to an employee, this AEO also uses the legislation/rates at the time the AEO was issued, it doesn't use new rates if they're released.

 NOTE: You can check the thresholds and percentages for any AEO with the steps in the deduction rate section of this guide. 

Click the options below to view an example calculation.

• Earnings Arrestment >
  • Alice's attachable pay is £3000 per month
  • This spans all three of the threshold bands of this AEO >

    

  • The calculation for this AEO is:
    • The rate for the first £655.83 earned is 0% = £0
    • The rate for £655.84 up to £2370.49 is 19%. In this example, that's:
      • £2370.49 - £655.84 = 1714.65
      • 19% of £1714.65 = £325.78
    • Next, we calculate the value due on earnings in the top threshold:
      • £3000 - £2370.50 = £629.50
      • 23% of £629.50 = £144.79
    • Finally, we total the amount due on each threshold:
      • £325.78 + £144.79 = £470.57

  The attachment value in this example is £470.57.

• Other Attachments >

  For this example, we'll use the Fines Enforcement AEO rates.

  • Fred is paid weekly, and his attachable earnings are £240.60 in the current pay run 
  • This falls into the band where attachable earnings range from £165.01 to £260.00 per week
  • The deduction rate in this band is 12% >

    

  In this example, the calculation is 12% of £240.60, so the attachment value is £28.87.

AEOs and pensions

We're often asked if AEOs affect pensions, and vice versa. If you'd like to learn more about this, visit our attachments and pensions guide.