Our Child Support Lawyers in Vancouver know that to calculate BC child support, first you need to know how to determine income from which child support is to paid. Determining income in order to calculate child support is not an easy task. Also note that there are two types of child support? Basic child support and Extraordinary expenses.
First let’s look at a few tips when it comes to calculating your income in order to calculate BC child support:
To Calculate BC BC Child Support, Look at the Gross Income not Net
Gross income is the income reported on Line 150 of your tax return. This is the income that does not include taxes or any other expenses that you can claim against your gross income such as child subsidies, etc. To calculate BC child support, the starting point is the income reported on Line 150 of T1 Generals.
Saying that you are employed by a company and that you have excessive taxes to pay in addition to numerous living expenses will not quite cut it. When determining your income, your calculations should be based on the BC Child Support Guidelines, for which as an employee of a company only your gross income will count.
The Court usually will look at your Notice of Assessment, T1 Generals or T4s to determine your Guideline Child Support Income. The Court will often take your most recent income level in to account. If your income fluctuates, the Court will take the average of the last three years of your gross employment income.
To Calculate BC Child Support, Look at ALL Sources of Income
It is important to hire a Child Support Lawyer in Vancouver to know exactly what income from all sources is. In summary to calculate BC child support, you need to add the following incomes together and not just personal income:
- Corporate income in case you own a corporation that makes a lot of money;
- Self employment income;
- RRSP income;
- Rental Income;
- Investment Income;
- Capital gains; and
- Foreign income.
If You are Self Employed, You Can Deduct Work Expenses
Self-employed people such as realtors and mortgage brokers can deduct reasonable expenses from their income. But that doesn’t mean everything you deducted for CRA purposes is legitimate. It is always amusing when self-employed litigants show to up to Court and says they earn $15,000 a year while driving a luxury car and spending thousands of dollars on “meals and entertainment”. The BC Family Court will not always accept the income you report to the CRA. The Court may embark in its own inquiry to determine your true income, and take our word for it, nothing annoys judges more than underestimating income when it comes to children.
The Court may ‘add back’ business expenses you claim in your taxes or may impute income to you based on a finding that you have under-reported your income or are intentionally unemployed.
To Calculate BC Child Support, some Income May be Excluded
Let’s say this year you were having a rough time and took out $20,000 from your RRSPs. RRSP take out is considered income for CRA purposes. But for child support purposes, if it is only a one time or irregular withdrawal, the income may not be included when the court wants to calculate BC child support.
Most recently, the BC Court of Appeal case of Brown v. Brown, determined that certain dividends paid out to the payor or a payor’s interest in a corporation should not be included for the purposes of income (or future income).
Another example is that if one year you earn an unusually high income which will likely not repeat that income won’t be your income for bc child support purposes.Or if you have no choice but to invest a part of your income in shares or dividends that do not instantly pay off, you may be able to deduct those expenses from your child support income and pay less child support.
Once your income is determined, the court will refer to the Child Support Calculator to determine your monthly child support obligations.
How to Calculate BC Child Support?
You can click here to determine how much you would have to pay for child support if your child resides with the other parent more than 60% of the time.
However, if your child resides with you and your ex-spouse on a shared basis, meaning the child lives more than 40% of the time with each parent, then you and your spouse’s incomes will get set-off against one another to determine child support. So if you earn $50,000 per year and your spouse earns the same, you would not have to pay child support to your ex-spouse.
Extraordinary expenses of the child are generally shared based on your proportionate incomes unless you and your spouse agree to a different ratio or a Court Order says you would have to pay more or less than your proportionate income. For more information on extraordinary expenses click here.
There are many other factors that have an affect in determining child support calculations and income. For more information or to set up a consultation, call us at 604-379-7790 or contact us.
The above content was updated in 2017 for more accuracy, comprehensiveness and freshness.