§1.03 Bonuses and Commissions

For a parent who frequently or routinely receives an annual bonus or works in sales and receives commissions, you will have to determine how to include the bonuses or commissions in the parent’s income. You have the discretion to average a parent’s total income over 12 months. [See FC §4060.]

You must determine whether the bonus or commission income is predictable or speculative [see County of Placer v Andrade (1997) 55 CA4th 1393, 1396–1397]:

• Predictable. When a parent receives a routine bonus of a certain percentage of salary or has a predictable pattern of commissions; it is appropriate for you to average the bonus or commissions income over 12 months and include it in the parent’s annual gross income.
• Speculative. If the bonus or commission income is not predictable, you may consider (a) excluding it from the calculation of gross income, but order the parent who may receive the income to notify the other parent on receipt so the other parent may attempt to modify the support payments, or (b) ordering that when bonus or commission income is received, a certain percentage must be paid as additional support. The latter is the better practice.