What Counts as Income for Child Maintenance?
The Child Maintenance Service uses your "gross income" to calculate how much you should pay. But what exactly does that include? This guide explains every type of income the CMS considers, what's excluded, and how they get your income information.
In This Guide
The Basic Rule: Gross Taxable Income
The CMS calculates child maintenance based on your gross taxable income - that's your income before tax is deducted, but only income that's subject to tax.
For most employed people, this is straightforward: it's your salary plus any taxable additions like bonuses or commission.
The CMS gets your income data directly from HMRC, so you can't under-report what you earn.
Income That IS Included
The following types of income are used in child maintenance calculations:
Employment Income
- Basic salary or wages
- Overtime pay
- Bonuses and commission
- Tips (if declared for tax)
- Statutory sick pay and maternity/paternity pay
Self-Employment Income
- Trading profits (after allowable expenses)
- Partnership income share
- Director's salary from your own company
- Dividends from your own company
Other Taxable Income
- Rental income (profit after expenses)
- Investment income and interest
- Pension income (if already retired)
- Taxable state benefits
Income That is NOT Included
Some types of income are excluded from the calculation:
Benefits (mostly)
- Universal Credit
- Child Benefit (yours or your partner's)
- Housing Benefit
- Personal Independence Payment (PIP)
- Disability Living Allowance
Exception: If you receive certain benefits and have very low/no other income, you may be on the Flat Rate (£7/week) rather than Nil Rate.
Other Exclusions
- A new partner's income
- Income from a student loan
- War disablement pension
- Certain compensation payments
How the CMS Gets Your Income
The CMS has a direct data-sharing agreement with HMRC. When a case is opened, they automatically retrieve:
- Employed: Your P60 or latest payroll data showing annual earnings
- Self-employed: Your Self Assessment tax return figures
This data is usually from the most recent complete tax year. For self-employed parents, there can be a delay as the CMS waits for the latest tax return to be filed.
Important: You cannot simply tell the CMS a different income figure. They will always verify with HMRC records.
What If Your Income Has Changed?
The HMRC data might be from last year, but your income may have changed since then. If your current income is at least 25% different from the HMRC figure, you can request a reassessment.
You'll need to provide evidence such as:
- Recent payslips (last 3 months)
- A letter from your employer confirming your salary
- Recent business accounts (if self-employed)
- Redundancy notice or evidence of job change
The CMS will then use your current income instead of the historical HMRC data.
Variations: When Additional Income Can Be Included
The receiving parent can apply for a "variation" to include income that wouldn't normally be counted. This might include:
- Unearned income over £2,500/year: Investment income, property income, etc.
- Diverted income: Money kept in a company or redirected to reduce assessable income
- Assets: If you have assets over £31,250 that could produce income
- Lifestyle inconsistent with income: If you appear to live well beyond your declared means
Variations are investigated case-by-case and can increase the maintenance amount if successful.
Frequently Asked Questions
Does my new partner's income affect child maintenance?
No. Your new partner's income is completely excluded from the calculation. Only the paying parent's income matters.
What about cash-in-hand work?
Legally, all income should be declared for tax. Undeclared income isn't automatically included, but if the receiving parent suspects hidden income, they can request a variation investigation.
Is redundancy pay included?
Statutory redundancy pay is not taxable up to £30,000 and is not included. Any amount above this that's taxable may be included in that year's income figure.
What if I have multiple jobs?
All employment income from all jobs is combined. HMRC aggregates your total earnings, and the CMS uses this combined figure.