How is child support calculated?
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 Federal Child Support Guidelines, federal tables that outline how much child support is due for various income levels and numbers of children.
Provincial Variations in Child Support
Child support is different for every province and changes depending on whether 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 15000 (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.
Complexities for Business Owner Parents
If a parent operates a business, a court may decide to depart from using their line 15000 income as the payor parent has more control over their income. In some circumstances, the court may order child support income based on the net revenue of the business after expenses, but before taxes. Arguments can be made to add back some expenses to the parent’s income if they are providing the parent with personal benefits, which will increase the income available for child support. If business income fluctuates, arguments can be made to average the income over time.
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.
Child Support Calculator
For a quick and convenient way to estimate child support, try our free Child Support Calculator. Designed for use across Canada, our calculator accommodates both shared and primary parenting situations and can even handle calculations when parents reside in different provinces. However, please note that if one parent is a business owner, child support calculations become more complex due to the discretion involved in assessing business income according to the Child Support Guidelines. In such cases, consulting a family lawyer is highly recommended.”