In this appeal from a judgment modifying child support we consider whether a judge of the Probate and Family Court employed the proper method in calculating the plaintiff father’s income from self-employment. When the plaintiff father, Kenneth R. Whelan, became unemployed one month after the parties divorced, he filed a complaint for modification of his *617child support obligations. The defendant mother, Kathleen A. Whelan, filed a counterclaim seeking an increase in child support, retroactive adjustment, and modification of provisions governing health insurance for the children. The parties filed additional modification claims, as we shall discuss, all of which were consolidated. The consolidated action was tried before the probate judge, who reduced child support, rejected the mother’s claims for back support and a credit for health insurance premiums, and imposed on the mother the obligation to contribute fifty percent of the cost of family health insurance. The mother appealed.
The mother’s principal claims are directed to the method employed by the judge in arriving at the amount of the father’s income from self-employment. That method, she first complains, calculated the father’s annual income by using an income-averaging approach that improperly included a four-month period of unemployment. Second, she asserts, the judge erred in reducing the father’s gross business income by expenses not shown to be related to production of that income. We agree and vacate so much of the judgment as depends on these determinations.
Background. The parties’ divorce judgment nisi entered February 11, 2004, and incorporated the terms of their separation agreement of even date. Matters pertaining to the four children merged with the judgment.1 See DeCristofaro v. DeCristofaro, 24 Mass. App. Ct. 231, 235 (1987) (merged separation agreement retains no independent legal significance). As provided by the terms of the agreement, the parties share joint physical and legal custody of the two younger children, who remained dependant at the time of the modification trial and were residing primarily with the mother.2
At the time of the divorce the father, a software engineer, had recently become employed by Maytech Industries after a two-*618year period of unemployment. The agreement reflects that his then-current annual base salary was $80,000. The mother’s annual income at the time was $28,890. The agreement required the father to pay child support to the mother in the amount of $413 per week, which reflected a weekly credit of $18 for the cost of health insurance. He was obligated to maintain health and dental insurance for the benefit of the children as long as such coverage was available through his present employer, and “for the benefit of the Wife so long as the Wife remains eligible for coverage and that coverage can be extended . . . through his present employer at no additional cost to the Husband over and above family plan premiums.” The parties were to share equally the children’s reasonable uninsured medical and dental expenses. In addition, the father agreed to pay to the wife further child support of “thirty (30) percent of any bonus income over and above his current base salary of $80,000” if two children remained unemancipated, subject to downward adjustment if only one child remained un-emancipated.3
Less than one month after the judgment nisi entered, the father filed a complaint for modification seeking a reduction in child support, alleging as a change in circumstances that he had lost his job at Maytech Industries on March 5, 2004. The mother filed an answer and counterclaim. She sought to increase child support to $512.57 per week,4 as she was now providing health insurance for the children. These actions lay dormant for a period, as the father resumed employment one month or so later.
In December, 2005, the father filed a second complaint for modification seeking sole physical custody and child support from the mother, asserting among other things that he “has a new job that enables him to spend more time at home with the children.” The mother’s counterclaim sought increased child *619support, payment of support arrears alleged to be due under the “bonus income” provision of the agreement, reimbursement for one-half of uninsured medical costs incurred by the mother and children, and an order that if due to the father’s failure to provide health insurance coverage she must provide such coverage for herself and the children, he will pay her one-half the cost of such coverage.5 A trial on all modification claims was conducted on June 8, 2007, and a judgment entered that reduced the father’s weekly child support obligation from $413 to $392, ordered the mother to pay fifty percent of the cost of family health insurance, denied the mother’s request for retroactive adjustments to child support, and implemented the parties’ agreement concerning the daughter’s college costs.6 The mother’s appeal challenges all but the latter aspect of the judgment.
Discussion. Following entry of judgment the judge issued findings of fact. The standard we apply in reviewing the judge’s findings is set forth in Millennium Equity Holdings, LLC v. Mahlowitz, 73 Mass. App. Ct. 29, 36-37 (2008):
“In reviewing a matter wherein the trial judge was the finder of fact, ‘we accept the judge’s findings of fact as true unless they are clearly erroneous.’ Green v. Blue Cross & Blue Shield of Mass., Inc., 47 Mass. App. Ct. 443, 446 (1999), quoting from Kendall v. Selvaggio, 413 Mass. 619, 620 (1992). ‘A finding is “clearly erroneous” when although there is evidence to support it, the reviewing court on the entire evidence is left with the definite and firm conviction that a mistake has been committed.’ Springgate v. School Comm. of Mattapoisett, 11 Mass. App. Ct. 304, 309 (1981), quoting from United States v. United States Gypsum Co., 333 U.S. 364, 395 (1948).”
See Martin v. Martin, 70 Mass. App. Ct. 547, 548-549 (2007). “Where there are two permissible views of the evidence, the factfinder’s choice between them cannot be clearly erroneous.” *620 Edinburg v. Edinburg, 22 Mass. App. Ct. 199, 203 (1986), quoting from Anderson v. Bessemer City, 470 U.S. 564, 573-574 (1985). Although we will not substitute our judgment for that of the probate judge, we will “scrutinize without deference the propriety of the legal criteria employed by the trial judge and the manner in which those criteria were applied to the facts.” Kelley v. Kelley, 64 Mass. App. Ct. 733, 739 (2005), quoting from Iamele v. Asselin, 444 Mass. 734, 741 (2005).7
The broad issue presented is whether the father has “demonstrate[d] a material and substantial change in circumstances sufficient to justify a reduction in his child support obligations.” Croak v. Bergeron, 67 Mass. App. Ct. 750, 750 (2006). If he has not, a related question is whether the mother has met this burden and the judge erred in denying the mother’s request to increase support. We discuss separately the mother’s contentions, detailing relevant facts as found by the judge, supplementing those findings with undisputed facts in the record. See Bassette v. Bar-tolucci, 38 Mass. App. Ct. 732, 733 (1995).
1. Father’s income, a. Income-averaging calculation. The probate judge reduced child support based on the father’s “loss of employment, and subsequent self-employment, which has lowered his income,” the “new expense to both parties of the cost of *621COBRA health insurance,” and the fact that the mother’s income “has increased modestly since the date of divorce, from $28,890 in 2004, to $37,500 in 2007.” Citing LaValley v. LaValley, 25 Mass. App. Ct. 918 (1987), the judge concluded that it was appropriate to average the father’s fluctuating self-employment income, and to include therein periods of unemployment, and that “certain legitimate business expenses (such as auto, gas, insurance, phone, home office expense, etc.) . . . should be taken into consideration when computing his ‘income.’ ”
The findings do not specifically set forth what the judge found to be the father’s annual income, nor do the findings detail which of the father’s claimed business expenses were found by the judge to be “legitimate business expenses.” It is, however, readily apparent that the $21 reduction in weekly child support is based upon a Child Support Guidelines (Guidelines) worksheet in evidence that was prepared by the father, dated May 11, 2007, that Usted his annual income as $79,872, or $1,536 per week, and the mother’s annual income as $37,501.8,9
The father asserts that he arrived at the figure of $79,872 “by deducting business expenses from the gross receipts and by averaging the resulting net figure over the entire period of his self-employment . . . comprising of April 1, 2006 through the end of December, 2006.” The trial judge generally accepted this approach. We do not think it is supported by the evidence or decisional law.
The uncontroverted evidence reflects that, since the divorce *622in February, 2004, the father was unemployed for about one month during 2004, then employed by Philips Advanced Metro-logy Systems (Philips), earning “about” $95,000. He left Philips in February or March, 2005, was unemployed for one month, and received unemployment compensation before becoming employed by The Math Works, Inc. (Math Works). The father’s 2005 income, as reflected on his Federal income tax return and W-2 forms, was $121,076, consisting of $118,648 in wages,10 $72 in interest income, $123 in State and local tax refunds, and unemployment compensation in the amount of $2,233.
The father asserts he ceased employment with Math Works on April 4, 2006, when he was laid off. At some point (the father testified it was in April, 2006, but the judge did not appear to credit this11), he commenced self-employment through his company, Cyber Engineering. According to the father’s 2006 Federal income tax return and W-2 forms, his income in that year was $95,184.40, including $29,865.03 in wages from Math Works,12 $8,414 in unemployment compensation, and reported net business income in the amount of $55,995 (with gross business receipts reported to be $64,275).13 Gross business receipts for the first four months of 2007 totaled $48,825.
Even assuming that, as the father claims, he commenced self-employment in April, 2006, it is apparent that his income from *623self-employment rose steadily, from gross receipts that, in 2006, averaged either $10,713 per month (based on six months of self-employment, commencing in July), or $7,142 per month (based on nine months of self-employment, commencing in April), to gross receipts that during the first four months of 2007 averaged $12,206 per month.
The picture that emerges of the father’s employment since the divorce is that he was consistently employed in the same industry and his income, though fluctuating somewhat, was steadily on the rise and never dipped below the $80,000 annual salary he was receiving on the date of the divorce. See Croak v. Bergeron, 67 Mass. App. Ct. at 752 (husband “has a consistent history of working in the nuclear power industry although he, at times, has experienced periods of unemployment”). Briefly unemployed soon after the divorce, the father resumed employment at an increased annual salary of $95,000, remaining at this new job for the balance of 2004. He reported income of $121,076 for 2005, and income of at least $95,184 for 2006. Monthly income from self-employment in 2007 was greater than it was during 2006.
This scenario is far different from the circumstances in LaValley v. LaValley, 25 Mass. App. Ct. at 920, where support was based on the husband’s earnings as of the date of trial. We noted there that his income on that date ($350 per week, or $18,200 annualized) was “a reasonable indicator of [the husband’s] long-term average income” from self-employment as a carpenter, on evidence that in some years he earned $12,000, and that his earnings might “fluctuate widely, depending upon the availability of carpentry work.” Ibid. We compared this evidence to that in Grubert v. Grubert, 20 Mass. App. Ct. 811, 813 & n.5 (1985), where “profits from [the husband’s] wholly-owned electronic components company were steadily increasing.” LaValley v. LaValley, supra at 920 n.5. See Schuler v. Schuler, 382 Mass. 366, 373 (1981) (“Where reduced income is temporary, a modification is not necessarily mandated”).
The uncontroverted evidence at trial established that, in the three-and-one-half-year period since the divorce, the father’s earnings had not decreased but indeed had increased substantially, and compelling evidence supports the conclusion that they were likely to remain, on average, at the increased level. On this *624record, we are “left with the definite and firm conviction that a mistake has been committed.” Guardianship of Clyde, 44 Mass. App. Ct. 767, 774 (1998), quoting from Custody of Eleanor, 414 Mass. 795, 799 (1993). We therefore vacate the judgment insofar as it reduces child support.
In light of the foregoing evidence, and the finding that indicates the mother’s income has only “increased modestly” since the divorce, the judge should, on remand, consider whether an increase in support is warranted. It will be appropriate to consider not only the fact and amount of the father’s increased income in determining whether “a material and substantial change in the circumstances of the parties has occurred,” Brooks v. Piela, 61 Mass. App. Ct. 731, 734 (2004), quoting from G. L. c. 208, § 28, but also any increased needs of the mother and of the children as well as the station in life of the respective parties. Brooks v. Piela, supra at 734-735, and cases cited.14
b. Business expenses. On remand, the judge will be required to make additional findings, and if necessary take additional evidence, on the question what business expenses may appropriately be deducted from the father’s gross receipts for purposes of establishing child support. We discuss this point to provide guidance on remand as to this question.
At trial, the father testified that he deducted from his gross weekly income those types of business expenses which he had deducted for tax purposes on his 2006 Federal income tax return. We earlier observed that the father’s income from self-employment was determined solely on the basis of his financial statement. Schedule A on the financial statement lists gross monthly receipts in the amount of $7,904.84, or $94,858 per year, and sets forth $1,329 in monthly business expenses.15
*625We begin by noting that gross income for purposes of establishing a child support amount is not necessarily the equivalent of a parent’s taxable income. As the Guidelines clearly establish, the definition of income on which support may be calculated is very broad.16 See Rosenberg v. Merida, 428 Mass. 182, 187-188 (1998) (Guidelines’ definition of income is broad and includes Social Security Disability Income dependency benefits paid directly to dependent based on noncustodial parent’s disability). Income is defined as “gross income from whatever source” — that is, a wage earner’s income before deductions for taxes or retirement contributions. See, e.g., Department of Rev. v. Foss, 45 Mass. App. Ct. 452, 458-459 (1998) (deviation from Guidelines’ computation of support not supported by consideration of *626father’s “spendable income”); Croak v. Bergeron, 67 Mass. App. Ct. at 752 & n.6 (probate judge appropriately included in income premature individual retirement account distribution, a trust distribution, and earned income set forth on forms 1099 and W-2). Thus, at the very least, it was error to deduct from the father’s gross income amounts for pension and profit sharing, and for taxes. See note 15, supra.
The 2006 Guidelines, in effect at the time of trial, do not specifically provide for deduction of business-related expenses from self-employment income. Indeed, these guidelines list in the definition of income from whatever source both “income from self-employment’ ’ as well as, by way of comparison, “net rental income.” Guidelines I-A(l), (25) (2006). Nevertheless, we think it is implicit that such expenses may be deducted where they are reasonable and necessary for the production of income, and our decisional law supports this conclusion. See, e.g., Smith-Clarke v. Clarke, 44 Mass. App. Ct. 404, 406 (1998) (due to lack of substantiation and commingling of personal and business expenditures, judge properly could disregard certain claimed business deductions from husband’s gross income or substitute a reasonable figure for others); Maillet v. Maillet, 64 Mass. App. Ct. 683, 689-690 (2005) (remand ordered where financial statement of husband, sole owner of business, set forth income of $800 per week, and “his corporation in 2002 had income of $227,744 exclusive of suspended losses and depreciation”). The recently promulgated Guidelines do not change the approach in this respect, but clarify it.17 Thus, in determining income from *627self-employment, a judge must determine whether claimed business deductions are reasonable and necessary to the production of income, without regard to whether those deductions may be claimed for Federal or State income tax purposes.
c. Retroactive award. On remand, if the judge determines that an increase in child support is warranted, the appropriateness of a retroactive award should also be determined. With respect to any period during which a complaint for modification is pending, a party is entitled to retroactive modification of a child support order where a judge finds that the parties’ circumstances have materially changed and that such modification is in the best interests of the children. See G. L. c. 119A, § 13(a); G. L. c. 208, § 28. See also Quinn v. Quinn, 49 Mass. App. Ct. 144, 146 (2000). A judge is not required to make an order for modification retroactive, but “absent a specific finding that retroactivity would be contrary to the child’s best interests, unjust, or inappropriate,” these factors should be considered. Boulter-Hedley v. Boulter, 429 Mass. 808, 812 (1999). If the father has been paying less than would otherwise have been required under the Guidelines, this “necessarily implies that the child has been receiving insufficient support during the pendency of the complaint.” Ibid.
2. Bonus income. We agree with the trial judge that reference in the parties’ separation agreement to “bonus income” is not “synonymous with ‘all income over $80,000.’ ” The language is plain and unambiguous. See Fried v. Fried, 5 Mass. App. Ct. 660, 662-663 (1977). No payments are due the mother on account of bonus income of the father.
3. Health insurance. The judge did not err in ordering the father to obtain health insurance for himself, the mother, and the children, and ordering the parties to contribute equally to the cost of such insurance. The mother herself requested this relief in both counterclaims.
As to any claim for reimbursement of health insurance premiums paid by the mother since the divorce, to which the father *628made no contribution, we agree that the claim should be addressed and direct that the matter be considered on remand.18
Conclusion. We vacate paragraph 1 of the modification judgment, which decreases child support. We affirm the remainder of the judgment, regarding college costs, prospective health insurance costs, and bonus income. The matter is remanded for further proceedings consistent with this opinion. Because a lengthy period of time has elapsed since the entry of the modification judgment, the judge may in her discretion take additional evidence to reflect current circumstances.19
So ordered.