The Federal Child Support Guidelines:
Step-by-Step

Step 5: calculate annual income

In this step, you will calculate income to figure out child support amounts.

You can use Worksheet 1 at the back of this booklet to help you calculate annual income for child support purposes.

You can find your total annual income by looking at Total Income, on Line 150 of your income tax return or notice of assessment.

Adjusting total income

You may have to adjust your income to reflect disposable income before taxes. This is because the annual income amount you use for calculating child support may not be the same income amount you use to calculate income tax. Worksheet 1 shows you how to adjust annual income for child support purposes.

Who must provide income information?

If your income is needed to calculate child support amounts, you must provide income information for the last three tax years. Both of you must provide income information when:

  • you have a split or shared custody arrangement,
  • there are special expenses (see step 7),
  • there is a claim of undue hardship (see step 8),
  • a child is at or over the age of majority (see step 2) and you are not using the guidelines as if the child was under the age of majority,
  • a paying parent earns more than $150,000 a year, or
  • if one of you has acted in place of a parent to the other parent's child.

If your case goes to court, the paying parent or both parents, depending on the situation as explained above, must provide complete and accurate income information. If you fail to do so, the judge can order you to comply. The judge can also impose a penalty (such as awarding costs to the other parent). If you still don't comply, the judge can, for example, set the amount of income for you that will be used to determine child support.

Proof of income

If you pay child support, or if your income is required to calculate a child support amount, you must show proof of your income to the other parent, or to the court if your case goes to court.

The proof of income you give must include copies of:

  1. income tax returns for each of the three most recent tax years, and
  2. notices of assessment and reassessment from the Canada Revenue Agency for the past three tax years.

You and the other parent can agree in writing on the annual income. If your case goes to court and if the income amount seems reasonable based on the evidence, the judge may use that amount.

You may also have to give other information about your income. For example, if you are an employee, you must give the most recent statement of earnings or pay slip. If a statement of earnings doesn't exist, you can give a letter from your employer providing your salary or wages. If you are self-employed, or if you control a corporation, you must give the corporation's financial statements. (See More information on calculating annual income.)

If any of these apply to you, you might also need to show:

  • information on any income you received from employment insurance,
  • information on any income you received from workers' compensation,
  • information on any income you received from disability payments,
  • details of any business partnerships, and
  • copies of trust settlement agreements along with the trust's three most recent financial statements.

In all cases, you must give the other parent copies of any documents you give to the court. If you live in Canada or the United States you must provide the documents within 30 days of the application being served.

If you live outside Canada or the United States, you must provide the documents within 60 days of the application being served.

Annual updates of income information

Once you have a child support order or agreement in place, a parent whose income is a factor in calculating child support must continue to provide income information if the other parent asks. The request for income information must be made in writing and may be made only once a year.

In some cases calculating annual income can be complicated. You may wish to consult a third party, such as a lawyer or an accountant.

If the paying parent's income is more than $150,000 a year

For incomes over $150,000, the tables list an amount of child support for the first $150,000, and a percentage you can use if you think it is appropriate for the part of the income over $150,000. Or, for the amount of income over $150,000, you can agree on an amount based on the condition, means, needs and other circumstances of both parents and the child, such as whether the child is over the age of majority and is earning an income.

Shared custody example

Michelle earns $50,000 a year and Patrick earns $40,000, based on their income tax returns. Neither has any other sources of income. Both Patrick and Michelle will have to provide their income information.

Split custody example

Michelle earns $50,000 a year and Patrick earns $40,000, based on their income tax returns. Neither has any other sources of income. Both Patrick and Michelle will have to provide their income information.

Sole custody example

The children will live with Patrick for at least 60 percent of the time over the course of a year, so he does not need to provide his income for this step. Michelle's salary is $50,000. She will have to provide her income information.