What Options Do I Have When My Income for Child Support Purposes Includes Bonuses and Overtime?

Hossein Berenji, Sep 03, 2021

Determining how much someone pays for child support in Los Angeles, California, can be a complicated matter.

For example, perhaps you’ve been ordered to pay child support to your ex. However, you may have your base pay, which is the pay you consistently earn, along with additional earnings. Is it fair for child support to factor in pay such as bonuses and overtime?

This overview will cover the essentials related to this question. However, it’s best to consult with a Los Angeles attorney who handles child support cases if you have questions. They can help you understand how bonuses and overtime may impact your support payments.

Child Support Payments in California: What Happens to Bonus and Overtime Pay?

A court will usually consider all sources of income when determining how much a spouse should pay their ex-spouse for child support after a separation or divorce.

Sources of income that may qualify as “annual gross income” under California law include (but are not limited to) the following:

  • Salaries
  • Commissions
  • Royalties
  • Rents
  • Pensions
  • Interest
  • Dividends
  • Workers’ compensation benefits
  • Income from the proprietorship of a business

Additionally, bonuses and overtime may influence a court’s calculation of child support payments. However, overtime pay and bonuses can be inconsistent.

For example, perhaps two spouses are getting a divorce. It’s determined that Spouse A should pay Spouse B child support due to a disparity in their financial situations.

The court may determine a base amount that Spouse A will pay by accounting for their consistent sources of income. This may be an annual salary. That said, maybe Spouse A also earns annual bonuses.

These bonuses vary from year to year because they’re based on the company’s performance. Some years, they may earn no bonus at all. How can a court thus include their bonuses as part of their income when determining what constitutes reasonable child support payments? By applying what’s known as a Smith-Ostler order.

Smith-Ostler Orders and Bonus Income

This order is defined as “an additional award, over and above guideline support, expressed as a fraction or percentage of any discretionary bonus actually received.”

Essentially, a Smith-Ostler order involves determining a percentage of bonus and overtime pay that should go to child support. Often, courts decide 13% is fair, although this isn’t always the case.

They’ll account for the following factors when deciding what percentage of bonus and overtime pay is appropriate:

  • The number of federal exemptions that apply to each parent
  • The number of children the parents have together
  • Who has custody of the children, and how custody is shared
  • Union dues
  • Health insurance premiums
  • Self-employment income
  • Whether a spouse has children from other relationships
  • All taxable income

Those are just a few examples. Again, these cases are often complex, and courts will evaluate each one on a case-by-case basis.

Your child support payments can include earnings from bonuses and overtime. However, that doesn’t mean a court always makes the right decision about how much you must pay.

You may suspect the Smith-Ostler rule has been applied incorrectly in your case. Keep in mind, you do not have to be the payor to dispute the court’s determination. Maybe you’re a recipient of child support payments. You might believe your ex isn’t paying you enough.

In either case, it’s important to remember that you have options. Discuss this matter with a Los Angeles family law attorney to learn more. They can improve your chances of paying or being paid a fair sum.