Does California consider bonuses as income when calculating alimony?
When an individual has a base salary and then for the past 5 plus years has received bonus (large) can this be considered in as income when calculating alimony?
paul
responded
6 years ago
Hi @tferris
Yes, in the State of California, income received in the form of a bonus is considered as income when making alimony calculations. Cal. Fam. Code § 4058. This is true for both temporary and final alimony orders. However, because true bonus income is not guaranteed and often based on company or employee performance, special consideration must be made to ensure against the under or over payment of alimony. A common approach to ensure accuracy, which has been validated by California courts, is to award a percentage of the bonus income payable in one lump-sum at the time the bonus income is received. Ostler v. Smith, 223 Cal. App. 3d 33 (1990); In re Marriage of Mosley, 165 Cal. App. 4th 1375 (2008); In re Marriage of Samson, 197 Cal. App. 4th 23 (2011). If bonuses are substantial or likely to increase after the divorce, then the percentage can be stepped-down as the bonus income grows larger.
For your situation (assuming you are the alimony payor), it is likely that your monthly alimony payment would be based on your base salary and you would pay a percentage of your bonus when received.
Yes, in the State of California, income received in the form of a bonus is considered as income when making alimony calculations. Cal. Fam. Code § 4058. This is true for both temporary and final alimony orders. However, because true bonus income is not guaranteed and often based on company or employee performance, special consideration must be made to ensure against the under or over payment of alimony. A common approach to ensure accuracy, which has been validated by California courts, is to award a percentage of the bonus income payable in one lump-sum at the time the bonus income is received. Ostler v. Smith, 223 Cal. App. 3d 33 (1990); In re Marriage of Mosley, 165 Cal. App. 4th 1375 (2008); In re Marriage of Samson, 197 Cal. App. 4th 23 (2011). If bonuses are substantial or likely to increase after the divorce, then the percentage can be stepped-down as the bonus income grows larger.
For your situation (assuming you are the alimony payor), it is likely that your monthly alimony payment would be based on your base salary and you would pay a percentage of your bonus when received.
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