Child Support When the Payor Is Self-Employed in British Columbia

When the parent paying support runs a business or works as a contractor, income is rarely a simple pay stub number. Tax returns can show low profit after deductions, and money may stay inside a company. That can leave the other parent unsure whether the support is fair.

British Columbia courts apply the Federal Child Support Guidelines, which include specific tools for these situations. This article walks through them in plain language.

This article covers the law of British Columbia.

Where the income figure starts

A parent's annual income for support is determined from the Total income heading of the T1 General tax form, adjusted under Schedule III. Where income fluctuates, the court may look at the last three years.

The table amount then depends on that income. The BC table figures use the payor's income only.

To use the table, you find the payor's province, the number of children and the income row in $1,000 steps. Monthly support is the basic amount for that row plus a percentage of income over the row's floor figure. The Guidelines give this BC example: two children and $51,250 of income works out to $807 + 1.54% × ($51,250 − $51,000) = $810.85.

These are only sample rows from the table that took effect with the amendment of 2025-10-01. Look up the exact $1,000 row or use the official table lookup for your own numbers.

Disclosure: getting the documents

An applicant must include the other parent's personal income tax returns for the three most recent taxation years. The respondent must provide income documents within 30 days if in Canada or the U.S., or 60 days elsewhere.

If both parents agree in writing on a parent's annual income, the court may accept that amount if it is reasonable given the income information.

Business and corporate income

If the payor owns or controls a corporation, personal income may understate what the business earns. The court may include in a shareholder, director or officer's income all or part of the corporation's pre-tax income, or an amount commensurate with the services provided, capped at the corporation's pre-tax income.

Schedule III also adjusts for business-related items that commonly affect self-employed payors.

• A capital cost allowance deduction on real property is added back.
• Payments to non-arm's-length persons are included unless the parent shows they were necessary to earn the income and reasonable.
• Amounts properly required for capitalization of a partnership or sole proprietorship can be deducted.
• Only the actual amount of business investment losses is deducted.

There is an exception for non-recurring capital or business investment losses: the court may choose not to apply the relevant Schedule III rules.

Imputed income

The court may impute an amount of income it considers appropriate. Examples include a parent who is intentionally under-employed or unemployed, property that is not reasonably used to generate income, or a parent who unreasonably deducts expenses.

Whether an expense deduction is reasonable is not decided solely by whether the Income Tax Act allows it. A deduction that is fine for tax purposes can still be questioned in a support case.

If the payor lives outside Canada, income is determined as though the parent were a resident of Canada. If the parent lives in a country with significantly higher tax rates, the court determines an appropriate amount.

What to do next

Cases involving a business often turn on documents, and an accountant's help may be useful alongside legal advice. Higher incomes have their own rule: above $150,000 the court may apply the table or set the table amount for the first $150,000 plus an amount it considers appropriate for the balance.

Other parts of the Guidelines can change the result. If each parent has at least 40% of parenting time over a year, the court must consider the table amount for each parent, the increased costs of shared arrangements and each parent's circumstances. On a parent's request, the court may also add section 7 expenses, such as child care or certain health and education costs, shared in proportion to the parents' incomes.

• Request three years of personal tax returns and notices of assessment.
• Ask for corporate financial statements and tax returns if the payor owns a company.
• List payments to family members or related companies.
• Note any sudden drop in income, change in work or unused property.
• Speak with a lawyer or accountant about whether imputing income may apply.

Frequently asked questions