What Is a Wage Garnishment In Canada?

What is a wage garnishment?

A wage garnishment, also called a garnishee order, is a court order that forces your employer to withhold part of your paycheque and send it to a creditor to repay a debt.

The money goes to the court, not directly to the creditor. From there, it gets forwarded to whoever you owe.

It happens a lot. Someone falls behind on payments, a creditor takes them to court, and suddenly their paycheque shrinks. Most people don’t know it’s happening until their employer actually tells them.

Garnishment continues until the debt is paid in full or you file something that legally stops it, like a consumer proposal or bankruptcy. Your creditor may also add their court filing fees and legal costs on top of what you already owe.

A wage garnishment stays in place until the debt is paid or you take legal action to stop it.

Source: Canada.ca – Garnishment of employee’s wages

Who can garnish your wages?

Almost any creditor can apply to garnish your wages if you owe them money and haven’t paid. That includes credit card companies, banks, collection agencies, and payday lenders.

However, most creditors have to go through the courts first. They need to file a lawsuit, get a judgment against you, and then apply for a separate garnishment order. That process takes time, often several months, and costs them money.

In practice, collection agencies usually pursue garnishment only for debts over $3,000 when they believe you have a steady income.

Three exceptions to the court process

Canada Revenue Agency (CRA).

If you owe taxes, the CRA can issue a “requirement to pay” notice directly to your employer or bank without needing a court order. They have the broadest collection powers of any creditor in Canada and move quickly.

Credit unions. If you signed an assignment of wages when you took out a loan with a credit union, they can garnish your wages based on that agreement alone. You gave consent when you signed.

Payday lenders. Some payday loan applications include a voluntary wage assignment. If you signed one, the lender can contact your employer to request a deduction without going to court. Most people don’t know that they agreed to this.

If you owe money and have income, any creditor can potentially garnish your wages, though most need a court order first.

Source: Canada.ca – Garnishing your income and accounts

How does wage garnishment work?

The process varies slightly by province, but the basic steps are the same across Canada.

Your creditor files a Statement of Claim

A Statement of Claim is the legal document a creditor files to start a lawsuit against you. It outlines how much you owe and why the court should enter judgment. You’ll be served with a copy and given a deadline to respond. In Ontario, that deadline is 20 days.

You can respond or let it go to default

If you file a Statement of Defence within the deadline, the court hears both sides. If you don’t respond, the court issues what’s called a default judgment. That’s a ruling against you because you didn’t respond by the deadline.

The court issues a judgment and garnishment order

Once the court confirms you owe the money, your creditor has the legal backing to pursue collection.

They apply for a separate garnishment order, which tells your employer exactly how much to withhold from each paycheque and where to send it. Your employer has no choice here. They’re legally required to comply, and most will let you know before the first deduction comes off.

Deductions begin

The deductions start and continue until the debt is paid, the garnishment order expires, or you file a consumer proposal or bankruptcy that triggers a stay of proceedings.

There may still be time to dispute the garnishment after it starts, but once money is being deducted from your paycheque, your options narrow quickly.

Source: Ontario Rules of Civil Procedure – Form 14A Statement of Claim

How much of your wages can be garnished?

Every province sets its own rules on how much a creditor can take. These limits apply to regular creditors like banks and credit card companies.

The CRA and family support enforcement have different, typically higher, limits.

Provincial garnishment limits

The table below shows what regular creditors (not the CRA) can take from employed individuals as of 2026.

Province	Garnishment limit	Dependant exemptions
Ontario	Up to 20% of net wages (50% for child support)	Judge may adjust based on circumstances
British Columbia	Up to 30% of net wages	Minimum exemption of $100/month (no dependants) or $200/month (one or more)
Alberta	First $800 protected. 50% of $800 to $2,400. 100% above $2,400	Exemptions increase by $200 per dependant
Saskatchewan	Must keep at least $1,500/month. Up to 70% above that	$300/month per dependant
Manitoba	70% of wages exempt	Minimum $250/month (no dependants) or $350/month (one or more)
Quebec	Up to 30% of gross wages	$30/week per dependant
Nova Scotia	Up to 15% of gross wages	Judge may adjust
New Brunswick	Set by the Sheriff	Based on individual financial needs
Newfoundland and Labrador	Exempt amounts from $649 to $1,059/month depending on household	$47 per additional dependant
Prince Edward Island	Set by the court	Based on financial situation and dependants

Source: Avanti – Canadian Payroll Guide: Wage Garnishment

CRA garnishment limits

The CRA follows its own rules. They can garnish up to 50% of a salaried employee’s net pay. For self-employed individuals, contractors, or anyone paid by invoice, the rate is up to 100%, though in practice it typically starts around 30%.

The amount your creditor can take depends on where you live, who you owe, and whether you’re employed or self-employed.

What income is protected from garnishment?

Certain types of income are generally protected from garnishment by regular creditors. These include Employment Insurance (EI), social assistance, Canada Pension Plan (CPP), Old Age Security (OAS), and the Guaranteed Income Supplement (GIS).

But “generally protected” comes with important caveats.

CRA and family support exceptions

The CRA doesn’t follow the same rules as other creditors. They can garnish CPP and OAS payments directly, without a court order. They simply send a letter to the Income Security Program office and redirect your pension payments.

I’ve seen this happen to retired clients, and it’s devastating when your only income is affected.

Family support enforcement can also garnish pension income. If you owe child or spousal support, up to 50% of your pension can be taken.

Protection ends once money is deposited

The other risk most people don’t think about is what happens after the money hits your bank account. Once government benefits are deposited, they’re mixed in with everything else.

At that point, a creditor with a garnishment order against your bank account can take those funds. The protection only applies at the source, not in your account.

Source: Canada.ca – Garnishing your income and accounts

Can creditors garnish your bank account?

Yes, and this is something most people don’t expect. If a creditor has a court judgment against you, they can apply for a garnishment order against your bank account as well as your wages.

The critical difference is that bank accounts don’t have the same exemption limits. No rule says a creditor can only take 20% of what’s in your account. If the order covers the full debt, they can take whatever’s there.

The CRA can freeze your bank account without a court order. They send a requirement to pay notice to your bank, and your funds are held. This is common when someone owes back taxes and hasn’t set up a payment arrangement.

If you’re self-employed, bank account garnishment is often the primary collection method because there’s no employer to serve a wage garnishment order on. Your clients or your bank become the target instead. If a creditor has a judgment against you, your bank account is just as vulnerable as your wages.

Source: Canada.ca – Garnishing your income and accounts

How do you stop a wage garnishment?

If your wages are being garnished, you have options. But most of them only work if you act quickly.

File a consumer proposal

A consumer proposal is the most common route I see in practice. It’s a legally binding agreement between you and your creditors to repay a portion of your debt over up to five years.

The moment you file, a stay of proceedings kicks in. A stay of proceedings is a legal order that immediately stops all creditor actions, including garnishments, lawsuits, and collection calls. Your creditors can’t touch your wages once it’s in place.

A consumer proposal also means you keep your assets and make a single fixed monthly payment that covers all your debts, not just the one creditor that garnished you.

Most people don’t know a garnishment is coming until their employer tells them. By then, the court process is already done. A consumer proposal is usually the fastest way to get your full paycheque back.

Other ways to stop a garnishment

File for bankruptcy. Bankruptcy also triggers a stay of proceedings and immediately stops garnishment. It’s a more serious step with longer-term effects on your credit, but for some people it’s the right answer. A trustee can walk you through whether a consumer proposal or bankruptcy makes more sense for your situation.

Pay the debt in full. If you can afford to pay what you owe, the garnishment ends. In practice, most people sitting across from me can’t do this, which is why they’re being garnished in the first place.

Negotiate with the creditor. You may be able to work out a repayment plan or lump-sum settlement before or after a garnishment starts. This is harder once the garnishment order is already in place because the creditor has no incentive to negotiate. They’re already getting their money.

The truth is, if a garnishment is already happening, a consumer proposal or bankruptcy is usually the fastest and most reliable way to stop it. Talk to a Licensed Insolvency Trustee. The consultation is free, and you’ll know exactly where you stand.

Frequently Asked Questions

Can the CRA garnish my wages without a court order?

Yes. The Canada Revenue Agency is the only creditor that can garnish your wages without going through the courts. They issue a “requirement to pay” notice directly to your employer or bank. If you owe taxes and haven’t set up a payment arrangement, they can act quickly.

Can a collection agency garnish my wages?

A collection agency can garnish your wages, but only if it goes through the full legal process. They need to file a lawsuit, obtain a judgment, and then apply for a garnishment order. Most collection agencies only pursue garnishment for larger debts, typically over $3,000, because the court process costs them time and money.

How long does the wage garnishment process take?

From the time a creditor files a Statement of Claim to the start of garnishment, the process typically takes two to four months. You have 20 days to respond to the claim (in Ontario), then the creditor needs to obtain a judgment and apply for the garnishment order. The CRA can move much faster because they skip the court process entirely.

Can my employer fire me for having my wages garnished?

No. A wage garnishment is not grounds for dismissal. Your employer is legally required to comply with the garnishment order, and they cannot penalize you for having one. That said, it can be uncomfortable, and I understand why people worry about this. Your employer has seen it before.

Can I dispute a wage garnishment?

You can dispute a wage garnishment at several stages. You can file a Statement of Defence in response to the original claim. You can apply to the court to have the garnishment order set aside if it’s causing severe hardship. You can also ask the court to increase the exemption amount applied to your wages. The earlier you act, the more options you have.

What happens if I ignore a Statement of Claim?

If you don’t respond within the deadline, the court can issue a default judgment against you. That gives your creditor the power to request a wage garnishment without your say. Ignoring the paperwork is one of the most common mistakes I see, and it almost always leads to a worse outcome.

Can wage garnishment take my entire paycheque?

For regular creditors, no. Every province has exemption limits that protect a portion of your income. But CRA garnishments follow different rules. They can take up to 50% of a salaried employee’s pay and up to 100% of self-employed income. If you’re self-employed and the CRA issues a requirement to pay, your full invoice payments can be redirected.

Does a consumer proposal stop wage garnishment immediately?

Yes. The moment you file a consumer proposal with a Licensed Insolvency Trustee, a stay of proceedings takes effect. This legally stops all garnishments, including CRA garnishments, and prevents creditors from starting new ones. It’s one of the fastest ways to stop a garnishment and get your full paycheque back.

Talk to a Licensed Insolvency Trustee

If your wages are being garnished or a creditor has threatened to take you to court, you don’t have to wait and hope it goes away.

A Licensed Insolvency Trustee can review your situation, explain your options, and help you stop the garnishment. The initial consultation is free and confidential. Contact us to book yours.