HOW IS CHILD SUPPORT CALCULATED? LAUNCH OF FREE CHILD SUPPORT CALCULATOR
By Marcus Sixta, Vancouver family lawyer, Calgary family lawyer, mediator, collaborative divorce lawyer
Child support is the regular payment that is made by one parent to another to support a child after separation or divorce. In Canada, child support is based on the Child Support Guidelines, federal tables which outline how much child support is due for various income levels and numbers of children. Calculating child support can be confusing and often using a child support calculator can help.
Child support is different for every province and changes depending on whether or not parenting time is shared or a child is primarily in the care of one of the parents. If the parent paying child support is an employee, the calculation of child support is relatively straightforward. Line 1500 (previously line 150) of the paying parent’s tax return is used to calculate their income for child support. This line represents total employment income before taxes. However, where the parent paying child support is a business owner, child support can be much more complicated.
If a parent operates a business, the starting point for the calculation of child support income is the net revenue of the business after expenses, but before taxes. Arguments can be made to remove some expenses if they are providing the parent with personal benefits. This will increase the income available for child support. Also, if business income fluctuates, arguments can be made to average the income over time. In addition, if a business requires retained earnings to operate this can be argued to reduce the income available for support. Of course, there are additional complications when the business has multiple shareholders. Often an accountant is required to calculate the income for child support purposes where a parent owns one or more businesses.
Crossroads Law is excited to announce the launch of our new in-house child support calculator. You can find our child support calculator here. This child support calculator can be used anywhere in Canada to calculate child support from employment income. It can provide support calculations when parents are in different provinces. It works for both shared parenting and primary parenting situations. However, no child support calculator, including our own, can provide an accurate assessment of child support when one parent is a business owner. There is simply too much discretion in the factors for the calculation of business income in the Child Support Guidelines. In these situations a family lawyer should be consulted.
If you are looking for more information about child support, need assistance in challenging FMEP, or are looking for a child support calculation for business income, contact the family lawyers at Crossroads law for your free consultation today.