I have two questions I was hoping to get some assistance with.
1 - What is NC law or practice of the courts regarding child support and alimony payments? Using the calculators on your site, it appears they all assume Gross income. However, when I do the math on what my taxes would be filing single vs married, then add up child support and alimony payments, it is somewhere in the range of 75% - 80% of my take home pay. This would not even allow me to pay mortgage/rent on a home to house me and my children when I had them, let alone other living expenses. Are there rules that govern how much the payer would be left with after child support and alimony payments?
2 - What is normal in NC in regards to annual and variable income (bonuses). When included in gross pay, it makes it appear my monthly cash flow is higher than it is. How are annual and variable bonuses and stocks typically handled?
(1) Child support is based on a worksheet and uses gross income. There is no worksheet, calculator, or formula for alimony. Alimony is based on 16 factors and if settling out of court, it is usually highly negotiable. The alimony calculator on our website is merely an illustration of what other jurisdictions do that have specific alimony formulas.
When negotiating alimony, use your net income. A good starting point is to subtract child support from the net monthly income and see what is left. The payor of child support is entitled to have enough available income to this reasonable needs and living expenses. Both parties completing financial affidavits can be helpful to see the dependent spouse’s need for alimony and the supporting spouse’s ability to pay alimony.
(2) Bonuses can be included in the annual gross income and divided by 12 to get the monthly gross income. If this presents a major cash flow problem for the payor, then bonuses can be paid as a percentage. For child support, typically this percentage is equal to the same percentage that the monthly child support obligation is to the monthly gross income. For example, if the payor’s child support obligation is $1,000/mo. and the payor’s monthly gross income is $10,000, then the payor would pay 10% of his/her bonus to the other parent.
Stocks vesting are typically handled by paying a percentage to the recipient.
Anna Ayscue
Attorney with Rosen Law Firm Cary • Chapel Hill • Durham • Raleigh • Wake Forest
Rosen Online | Unlimited confidential access to a North Carolina attorney for $199/mo - click here
The response posted above is based upon the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with an attorney, fully explain your situation, and allow the attorney sufficient opportunity to research the applicable law and facts required to render an accurate opinion. The basic information provided above is intended as a public service only, a full discussion with an attorney should be undertaken before taking any action. The information posted on this forum is available for public viewing and is not intended to create an attorney client relationship with any individual. These answers are provided for informational purposes only, a person should consult with their own individual legal counsel before taking any action that could affect their legal rights or obligations.
Thank you. Is there a law or guideline regarding taking a max percentage of the payers net income? As an example, even if there was a “need” on the alimony side, would it be capped to 50% of take home pay between CS and Alimony, as an example?
Also, what is the definition of reasonable in regards to the payers budget? Does it mean barebones where you live in a trailer and stare at a wall eating ramen every day, or does it allow for modest entertainment, a safe home in a safe neighborhood, eating healthy foods, etc.?
While there is no maximum percentage of the payor’s income, oftentimes a final alimony and child support amount will be approximately 50-60% of the payor’s total gross income. But this varies from case to case depending on the need of the recipient, the work history of the recipient, the income of the recipient, etc. and the percentage can be lower.
“Reasonable” varies from case to case and is different for everyone and for every situation. But generally the payor needs to have enough disposable income to pay for basic living necessities and routine bills and expenses.
Having both parties complete a financial affidavit can be very helpful. This shows each party’s total income and all of their monthly expenses.
Anna Ayscue
Attorney with Rosen Law Firm Cary • Chapel Hill • Durham • Raleigh • Wake Forest
Rosen Online | Unlimited confidential access to a North Carolina attorney for $199/mo - click here
The response posted above is based upon the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with an attorney, fully explain your situation, and allow the attorney sufficient opportunity to research the applicable law and facts required to render an accurate opinion. The basic information provided above is intended as a public service only, a full discussion with an attorney should be undertaken before taking any action. The information posted on this forum is available for public viewing and is not intended to create an attorney client relationship with any individual. These answers are provided for informational purposes only, a person should consult with their own individual legal counsel before taking any action that could affect their legal rights or obligations.
Thank you for the information. While I understand each situation is unique with its own variables, the general 50% to 60% gross is what I’m struggling to understand.
Let’s do a simple example of a single earner, $200k income a year. When filing single, that would equate to about $62k in taxes across Federal, FICA, and State. Leaving about $138k net. If paying 50% to 60% of gross, that would equate to paying out $100k to 120k a year, leaving the payor with ~$18k to ~$38k a year to live on and provide for the kids. That seems like radically different standards of living with the payor living in poverty or close to it; the receiving spouse would then be living on six figure, not taxable income.
In that scenario, child support would be based on a Worksheet, likely either Worksheet A for primary physical custody or Worksheet B for joint physical custody. Child support is based on gross income.
Alimony would be based on net income. You can calculate how much monthly disposable income is available by subtracting out child support and taxes. Then you may find that completing a financial affidavit (which lists your income and all of your living expenses) can be helpful when negotiating alimony.
The payor of alimony is entitled to have reasonable and sufficient income to meet their living expenses.
Anna Ayscue
Attorney with Rosen Law Firm Cary • Chapel Hill • Durham • Raleigh • Wake Forest
Rosen Online | Unlimited confidential access to a North Carolina attorney for $199/mo - click here
The response posted above is based upon the limited factual information made available and is not intended as a full and complete response to the question. The only reliable manner to obtain complete and adequate legal advice is to consult with an attorney, fully explain your situation, and allow the attorney sufficient opportunity to research the applicable law and facts required to render an accurate opinion. The basic information provided above is intended as a public service only, a full discussion with an attorney should be undertaken before taking any action. The information posted on this forum is available for public viewing and is not intended to create an attorney client relationship with any individual. These answers are provided for informational purposes only, a person should consult with their own individual legal counsel before taking any action that could affect their legal rights or obligations.