Understanding How Child Support Is Calculated
After a divorce or separation, one individual will be left with the couple’s children. This is the custodial parent. The non-custodial parent is the parent who does not live with or primarily care for the children. The parent is also charged with providing support for his or her children.
For the most part, determining child support is a formulaic procedure, meaning that the same rules for determining support apply to every person. The custodial parent’s income is not a part of this formula, and the non-custodial parent must pay the support every month until the children turn 18.
Understanding Gross and Net Income
Child support is a percentage of an individual’s net income, or the money he or she is left with after taxes, dues and other financial obligations. The amount of money an individual earns before these obligations is the gross income. Gross income may consist of:
- Regular salary
- Bonuses
- Tips
- Interest
- Royalties
Any source of income is considered part of an individual’s gross income. The net income is what is left after an individual pays:
- Income taxes
- Social security taxes
- Union dues
- Health insurance premiums for his or her children
An individual’s net income is subject to a formula that determines child support payments.
The Child Support Formula
Once a court knows what an individual’s net income is, it will determine what percentage is supposed to be taken from it to support the individual’s children. The most commonly used percentages are:
- 20% for one child
- 25% for two children under one parent’s custody
- 17.5% each for two children under two parents’ custodies
It is important to note that this percentage only applies to the first $6000 of an individual’s net income each month.
This means, for instance, that an individual who makes $6000 or less will have his or her entire net income subjected to child support while an individual who makes more than $6000 will have only $6000 of his or her net income subjected.
Contact Us
If you have questions about how your child support payments will be calculated, contact the Austin child support lawyers of Slater & Kennon LLP, at 512-931-3726.