Taxable income

Taxable income is the figure on your tax return that shows how much of your income is subject to tax after deductions. For most parents, it is largely made up of salary or wages.

In the child support formula, taxable income, along with your care percentage and children, is the basis of the calculations. Taxable income is transformed to produce two closely related income measures, adjusted taxable income (ATI) and child support income.

Definition

For the purposes of FA, taxable income has the same meaning as in the Income Tax Assessment Act 1997. It is generally the amount of assessable income received by an individual for an income year, minus any allowable deductions.

Definition source: Guides to Social Policy Law, Child Support Guide, Version 4.97, released 20 March 2026, 1.1.T.20 Taxable income.

ATO definition

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The Australian Taxation Office defines taxable income as:

Taxable income
Assessable income − allowable deductions

Assessable income includes most income you earn, such as salary and wages, bonuses, interest, dividends, and rental income. Deductions reduce that amount to arrive at taxable income.

Role in the formula

Taxable income is the base income figure used throughout the child support formula. All other income measures are built from it.

Income flow
Taxable income → ATI → Child support income
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Adjusted taxable income (ATI)

ATI is taxable income plus a defined set of additional amounts included under child support law.

Adjusted taxable income (ATI)
Taxable income
+ reportable fringe benefits
+ target foreign income
+ total net investment loss
+ tax-free pensions or benefits
+ reportable super contributions

For most parents, these additions do not apply, so ATI is the same as taxable income.

Child support income

Child support income is the figure used to calculate each parent’s income percentage and, when parent incomes are combined, the cost of children. It is derived from ATI through formula deductions.

Child support income
ATI − self-support amount − any relevant adjustments

The self-support amount is deducted for every parent. It sets aside a base level of income for personal living costs before child support is calculated.

Further deductions only apply where relevant, such as when a parent supports other children or has multiple child support cases.