Is Gross or Net Income Used When Calculating Support?
By Jennifer M. Segura
We often are asked how child and/or spousal support is calculated; whether gross income or net income used. In trying to explain this concept to a client, I realized, it is complicated and can easily be misunderstood. So, I thought it might be a great topic to clarify for our clients and our readers. So here goes…
In California, it can be described that spousal support calculations are based on net income. However, that can be misleading because what that means in practice, is we begin with gross income, then apply a uniform, statutory list of allowable deductions. [The California Codes in question] make it clear that this is the appropriate statutory approach, although it is understandable how it can be an easy question to confuse.
Therefore, your net income in jurisdictions such as California, is not necessarily what your paycheck says you bring home each week. Your take-home pay might be less than it seems. This is based on voluntary deductions such as pension loan payments, voluntary 401k contributions, or voluntary contributions to a charity. So when you hear the statement “spousal support is based on net income,” it is more complicated than you think. It is typically your divorce professional (or someone on your financial team) who comes up with your net income. It is not merely looking at your take-home pay and automatically using that number. The net income utilized within the support calculation is arrived at AFTER taking your gross income and deducting statutory taxes and, if applicable, mandatory union dues, mandatory retirement contributions, health insurance premiums, etc. Also, here in California, spousal support calculations are arrived at after deducting child support payments, if there is child support being awarded in that same case.
See… I told you it is complicated! If you are ever confused about the support numbers, please ask for the audit trail of your calculations. The software we use has a great feature that allows us to print out your entire calculation. We can show you each step of how the system itself came up with the support numbers.
Need help calculating support numbers? Call San Diego Family Mediation Center at (858) 736-2411 to schedule your free consultation.