Colorado Family Law Blog
Child Support Calcualations: Will overtime pay be included in your gross income?
Here in Colorado, Child Support Payments are calculated using a formula. The Formula includes the number of overnights you have with your child, your gross income and an expense calculation for the child's needs.Gross income is an important piece of t...
Here in Colorado, Child Support Payments are calculated using a formula. The Formula includes the number of overnights you have with your child, your gross income and an expense calculation for the child's needs.
Gross income is an important piece of the formula and you want to make sure that it is calculated correctly. So, the question arises...what about overtime pay? Is it part of the calculation for gross income?
First lets talk about what gross income includes. It includes income from any source including the following:
- Wages, Salary and Tips
- Independent Contractor payments
- severance pay
- pensions and retirement benefits
- royalties, rents, interest
- trust income
- capital gains
- social security benefits
- worker's compensation benefits
- unemployment insurance benefits
- disability insurance benefits, or health insurance benefits to the extent that they replace wages or provides income in lieu of wages
- monetary gifts or prizes
- distributions from partnerships, limited partnerships or closely held corporations or LLC's
- alimony or maintenance received
As you can see, gross income is almost any form of income that you can imagine receiving. However, when it comes to overtime pay there is an exception.
If overtime is REQUIRED by your employer IT IS CONSIDERED INCOME. However, if you work overtime by choice (meaning more than 40 hours or more than what would otherwise be considered to be full-time employment) then the overtime pay you receive IS NOT CONSIDERED part of your GROSS INCOME for the purposes of calculating child support. If you work additional jobs over and above full time employment that income is also NOT CONSIDERED part of your GROSS INCOME.
The exception to this rule is for people that are self employed. If you are employed by a closely-held corporation of which you are an owner and overtime is necesitated by the responisbilities of your position, your overtime will be held as required and will be considered as part of your GROSS INCOME. In the case of "In re Marriage of Rice, 987 P.2d 947, 948 Col. App. 1999", the Appelete Court based its holding on findings that the father was his own boss and had no supervisor to command him to work overtime, the father was not able to perform his job duties unless he worked overtime, and the father's failure to work overtime would result in penalties to the corporation that would hurt him financially as an owner of the corporation. Id.
Also, monies received as child support payments are not included in gross income.