Both parents in the State of Texas – and every other state – are responsible for supporting their children financially, and when parents divorce, this responsibility is addressed by child support payments. These payments are calculated according to state guidelines that many find confusing – especially when it comes to issues such as how overtime pay and work bonuses affect child support payments. If you have concerns about your child support payments, an experienced Harker Heights Family Law attorney can help.
Matters related to child support payments are addressed in the Texas Family Code. Whenever it is reasonable to do so, the court calculates each parent’s gross income by first calculating the individual’s annual income and then dividing by 12 to obtain an average monthly gross income. The income used in the state’s calculation process includes all of the following:
100 percent of the individual’s wages, salary income, and any other compensation for personal services, including commissions, overtime pay, bonuses, and tips
Any income the individual earns in interest, dividends, and royalty income
Income from self-employment
Net rental income (the income derived from renting out a property after deducting the mortgage payments and operating costs)
Any other income the individual receives, including severance pay, pensions, trust income, retirement benefits, annuities, social security benefits, capital gains, and more
In other words, if you or your ex earn overtime and/or bonuses, it is part of your gross earnings, which means they will ultimately be factored into the child support you either pay or receive.
Child support is calculated from one’s net income, which refers to the gross income defined above minus approved deductions that include:
Federal income taxes (as calculated for a single person with one exemption and the standard deduction)
State income tax
Social Security and Medicare taxes
Health insurance expenses (that apply to the children only)
Once all allowed deductions are subtracted, child support is calculated in accordance with the final amount (the net income).
The approach that Texas takes to calculating child support is based on the best interests of the children involved. As such, the state does not alter child support payments in accordance with how much time the parent who pays child support spends with the children. Ultimately, Texas plugs numbers into its calculation process – without factoring in some of the variables that many other states consider. If the court has a good reason for doing so, however, it can deviate from the state’s standard calculation method.