Calculating Child Support Payments in High-Income Families

Making the difficult decision to end your marriage and seek a divorce becomes even more challenging when minor children are involved. In California, former spouses and parents of children are obligated to care for their children physically, emotionally and financially, usually resulting in one of the parents offering child support to the parent who will care for the children most of the time. When the family is a high income-earning family – where both spouses and their children have become accustomed to a particular lifestyle – calculating child support becomes that much more complicated. If you’re preparing for a divorce and looking to outline a parenting and child support plan, it’s best to speak with an experienced Irvine child support lawyer to develop an approach that works for your family.

While each state has individual guidelines for calculating child support, California employs a specific set of guidelines to calculate what is owed to each parent. If you’re a high income earning parent, you may wish to review these guidelines and speak with your attorney about the best approach for keeping child support payments reasonable and within the bounds of your former spouse’s and children’s lifestyle.

California’s Child Support Guidelines

California’s child support laws state that each parent is mutually responsible for supporting their children and that children must receive fair, timely, and sufficient support. Child support is calculated by reviewing each parent’s gross income, the percentage of time each child spends with each parent, income tax deductions that parents can claim, mandatory payroll deductions like health insurance, pensions and union dues, and child costs incurred by either parent. The state will then plug all of this information into a calculator designed to produce a figure that each parent must supply to care for their children. Your Irvine child support lawyer can help you estimate your specific costs.

California’s Child Support Formula

California’s formula for calculating child support looks like this:

Child support = Parent’s combined total income (high net – (% of high earner’s care)(combined total monthly disposable income))

Simple right? Not so much! The formula aims to consider each parent’s income and adjusts for the highest-earning parent, presuming that that parent should be responsible for the bulk of child support for the children. Generally speaking, the greater the disparity between the two parents’ income and the less time the higher-earning parent spends with the children, the more child support that parent will owe.

Speak with an Irvine Child Support Lawyer to Learn More

Calculating child support payments as a high-earning parent that won’t be caring for the children the majority of the time can leave you at a financial disadvantage. It’s recommended you speak with an experienced Irvine child support lawyer to ensure you’re getting a fair deal. Contact us today.

Frequently Asked Questions

Is the guideline formula still used when a parent earns a very high income?

Yes, as the starting point, because the guideline is presumptively correct in every California case. But California recognizes an exception where a parent has an extraordinarily high income and the formula would produce an amount exceeding the children’s needs. In that situation the court may order less than guideline. The burden sits with the high-earning parent to show that the guideline figure exceeds what the children reasonably need, and that showing has to be built from evidence about the children’s actual circumstances.

How do the children’s needs get proved in a high-income case?

With documentation rather than characterization. The productive evidence is the children’s actual historical spending: housing, schooling, activities, travel, medical care, and the standard of living they have experienced. That record supports the argument in both directions, which is why both parents benefit from assembling it early. General assertions that the guideline number is excessive, without a factual picture of the children’s lives, tend to fail, and so do claims of need untethered to what the family actually spent.

What income counts when compensation is complex?

More than salary. Bonus, commission, self-employment earnings, distributions from a closely held business, rents, interest, dividends, and the realized value of equity compensation all figure in. For a business owner, income available for support is reconstructed from the entity’s records rather than taken from the tax return, adding back personal expenses paid by the company and normalizing owner compensation. That reconstruction is done by a forensic accountant and is usually the most consequential part of a high-income support case.

How is volatile income handled in the order?

Best by building the mechanism into the order rather than returning to court each time compensation changes. The common structure is a base monthly amount set on predictable income plus a defined percentage of bonus or variable compensation applied when it is actually received, with an annual true-up. Courts also use a representative averaging period where income fluctuates year to year. Either approach beats a fixed order set on a single year’s numbers, which invites a modification motion the first time the figure moves.