When people look at a child support or spousal support number, they naturally ask: "What does each household actually end up with?" The answer is Net Disposable Income — NDI. It is the amount of money each parent has available to spend after all taxes, mandatory deductions, government benefits, and support transfers are accounted for. NDI is the bottom line: not what you earn, not what the table says, but what you actually have in your pocket.

This article explains how NDI is calculated, why it matters, how it differs from INDI, and why the calculation is impossible to do accurately by hand.

The NDI Waterfall

NDI is calculated by starting with gross income and applying a series of adjustments in sequence. The result is the actual cash available to the household:

This is a simplified illustration. In practice, the full computation also incorporates Schedule III adjustments (union dues, mandatory pension contributions, RRSP deductions), the eligible dependant credit, childcare deductions, and other items that affect taxes and benefits. The calculator handles all of these automatically.

Worked Example

Consider two parents in Ontario: the payor earns $100,000 and the recipient earns $40,000. They have two children in shared custody. At the mid-range spousal support scenario, the NDI waterfall produces:

At the mid-range scenario, the payor retains $63,336 in NDI while the recipient has $60,471 — a 51.2% / 48.8% split. The taxes and benefits shown above already reflect the effect of spousal support (deductible for the payor, taxable for the recipient), so no separate "tax effect" line is needed. Note that even the payor receives some CCB ($3,496) — at $100,000 income the benefit is reduced but not fully phased out with two children.

NDI vs INDI — A Critical Distinction

The SSAG with-child formula does not actually target NDI. It targets INDI — Individual Net Disposable Income. The difference is how child support is treated:

The SSAG authors chose INDI over NDI because NDI "bulk[s] up the recipient's income in a somewhat misleading fashion," as they wrote in the 2008 Final Version. Using gross child support obligations gives a cleaner measure of each adult's financial position. The calculator reports both: INDI is what the formula targets (40%/43%/46%), and NDI is shown as a reference point for actual household spending power.

Why NDI Cannot Be Calculated by Hand

The NDI waterfall looks straightforward, but every component interacts with every other component in ways that create circular dependencies. Spousal support changes taxable income, which changes taxes, which changes after-tax income, which changes government benefits (because CCB and GST credits are income-tested), which changes NDI, which changes the amount of spousal support needed to hit the target INDI percentage.

This circular dependency means the calculation must be performed iteratively — the software guesses a spousal support amount, runs the full tax calculation for both parents, checks whether the INDI target is met, adjusts the guess, and repeats until it converges. This typically takes hundreds of iterations. No spreadsheet or manual calculation can reliably reproduce this without building a full tax engine.

Why NDI Matters for Fairness

NDI is the only measure that shows the real economic outcome of a support arrangement. Gross income ignores taxes. After-tax income ignores benefits. Table amounts ignore the interaction between child and spousal support. Only NDI captures the full picture: what each household actually has available to spend after every transfer, tax, and benefit is accounted for. A support arrangement that looks "fair" on the gross numbers may produce a significant NDI imbalance — or one that looks punitive on the gross numbers may actually produce near-equal spending power.