Often times, an employee’s wages do not paint a complete picture of what his or her earnings actually are. An employee’s income for support purposes is often calculated by looking at a party’s entire compensation package, which can include certain perquisites. In certain cases, these perquisites (or “perks”) are included in a party’s income for the purpose of calculating how much support is due.
“Income” for support purposes “includes compensation for services, including, but not limited to wages, salaries, bonuses, fees, compensation in kind, commissions and similar items . . . .” The support statute lists other types of income, but for the purposes of this entry, this quoted portion is relevant. In order to properly calculate income for support purposes, one needs to consider whether the value is “compensation for services.” As a standard practice, courts will include the contributions that an employer makes to employee retirement plans. Courts also will include the value of certain stock awards given to employees.
The definition of “income” explicitly includes ‘compensation in kind.’ For this reason, the Pennsylvania Supreme Court has said that the value of perquisites such as cars, phones, fuel expenses, and car insurance can be included in a party’s income for the purpose of calculating a support award.
These sorts of considerations tend to apply to high earners who have complicated compensation and benefits packages. It is important in such cases that you have a skilled professional review your case to ensure that the parties' incomes are properly calculated. If you need assistance with your support matter, please contact us today!