How is child support determined when the payor is self-employed?

Calculating child support for a self-employed payor is often the most contested part of a support dispute. The Guidelines require full financial disclosure: the payor must produce their personal tax returns and Notices of Assessment for the past three years, plus financial statements and corporate returns if they operate through a company. This disclosure allows the other parent and the court to assess what the payor actually earned versus what their return shows as taxable income.

Courts look beyond taxable income because self-employed individuals can legitimately deduct many business expenses that employed workers cannot. Judges may add back personal expenses run through the business, excessive depreciation, or non-arm's-length salaries paid to relatives. If a payor owns a corporation and chooses to retain earnings in the company rather than pay themselves, the court may attribute some of those retained earnings as available income.

If the payor refuses to provide disclosure or their records are incomplete, the court can impute income — essentially guessing an appropriate income level based on industry standards, past earnings, or lifestyle evidence. Courts take non-disclosure seriously and can draw adverse inferences. Getting a forensic accountant or experienced family lawyer involved early is highly advisable in any case involving a self-employed payor.