- In the United States, income is the primary criteria for calculating child support.
- States use either gross or net income as their income base.
- The definition and determination of income varies state by state.
- For people who receive who are permanent employees and received the same amount in each paycheck, income determination is easy. They usually receive a benefit package subsidized by their employers.
- For those who rely on irregular pay like commissions or those who are self-employed, determining income is more difficult. Courts may resort to averaging income over time or imputing income based on what they should make based on their skills.
- For those self-employed or temporary individuals (like people who work at companies for a defined period of time), they usually receive a higher wage in lieu of benefits. They also receive a higher wage for no promise of permanent employment.
- Example: Joe is an hourly employee of XYZ Company. He makes $44.00 an hour. He receives $20,000 in benefits which are not taxed. Rob is a contractor for XYZ Company with a six-month contract. He makes $60 an hour. Rob is paid a higher hourly rate because he has no benefits and he does not enjoy permanent employment. During a twelve month period, Rob will make $32,000 more than Joe
- Deductions allowed by self-employed people against income vary by state. However, it is uncommon that self-employed people can deduct the same deductions enjoyed by their employee counterparts.
- Child support based on income might work if there were significant safeguards to ensure obligators had an ability to pay. Most of the time, there are not.
- Child support should be based on the ability to pay.