When a parent earns income through a corporation, receives dividends, or is self-employed, the child support calculation becomes significantly more complex than a straightforward salary case. The Federal Child Support Guidelines use "guideline income" — not reported T1 income — and the adjustments prescribed by Schedule III of the Guidelines can dramatically change the number used for the table lookup. Many self-represented litigants understate their guideline income because they use their T1 total income without applying these adjustments.

This article explains how dividends, capital gains, corporate income, and self-employment income are treated for child support purposes, and what to enter in the calculator.

Dividend Income — The Gross-Up

Dividends received from Canadian corporations are "grossed up" for guideline income purposes to reflect the pre-tax corporate earnings they represent. The gross-up rate depends on the type of dividend:

The gross-up exists because the corporation has already paid tax on the earnings before distributing them as dividends. The gross-up recovers the pre-tax amount. A parent who receives $50,000 in eligible dividends has guideline income of $69,000 from those dividends alone — a difference of $19,000 that directly increases the child support table amount.

Corporate Income — Schedule III Attribution

When a parent controls a corporation, the corporate structure does not shield income from child support. Schedule III of the Guidelines allows courts to "look through" the corporation and attribute income back to the parent in several ways:

The principle is straightforward: a parent's obligation to their children is based on their actual economic capacity, not the income they choose to report through corporate tax planning.

Self-Employment Income

Self-employment income can be averaged over three years under Schedule III to smooth out year-to-year fluctuations. Courts may also add back deductions that primarily benefit the individual rather than the business — home office expenses, personal vehicle costs, and meals and entertainment are common add-backs.

Self-employed parents also pay both the employee and employer portions of CPP contributions (approximately 11.9% combined in 2025, versus 5.95% for employees). This higher CPP burden reduces NDI compared to an employee earning the same gross income — a factor the calculator accounts for automatically.

What to Enter in the Calculator

The calculator accepts income by type — employment, self-employment, eligible dividends, non-eligible dividends, capital gains, and other income. The dividend gross-up and capital gains inclusion are applied automatically based on the income type selected. For corporate add-backs (retained earnings, personal benefits, management fees), use the Schedule III adjustments section to add labeled amounts with descriptions.

If you are unsure whether a particular income item should be included or how to categorize it, the safest approach is to run two scenarios — one with and one without the disputed item — to understand the range of possible outcomes. This gives you a concrete number to discuss with your lawyer or mediator rather than guessing.