A Smith/Ostler order in California sets child or spousal support in two pieces: a fixed monthly amount calculated on the paying parent’s steady salary, plus a separately stated percentage of any bonus, commission, or other irregular income received during the year. There is no statutory Smith/Ostler bonus percentage in California. The court sets the figure case by case, and while 10 percent per child for child support is a common reference point drawn from the original 1990 decision, the actual number depends on the parents’ incomes, custody split, the children’s needs, and, for spousal support, the factors in Family Code Section 4320.
What the Percentage Attaches To
The base monthly amount is calculated using only predictable, recurring income. The percentage then captures whatever variable compensation arrives on top of that: annual bonuses, sales commissions, profit-sharing distributions, stock vesting, and similar payments. If no bonus arrives in a given year, no additional support is owed beyond the base.
The statutory hook is California Family Code Section 4064, which lets the court adjust child support to accommodate seasonal or fluctuating income.1California Legislative Information. California Code FAM 4064 Rather than averaging uncertain future bonuses into a single monthly figure and risking overpayment in lean years or underpayment in strong ones, the percentage tracks actual earnings automatically. The approach comes from In re Marriage of Ostler & Smith, where the trial court set fixed support on the husband’s salary and added a percentage of his variable annual bonus. The Court of Appeal upheld that structure as within the trial court’s discretion.2Justia Law. In re Marriage of Ostler and Smith (1990)
California defines income broadly for support purposes. Under Family Code Section 4058, gross income includes wages, salaries, commissions, bonuses, royalties, rents, dividends, pensions, interest, trust income, disability and unemployment benefits, severance pay, and certain military allowances.3California Legislative Information. California Family Code 4058 Employee benefits like a company car or housing allowance can also count if they meaningfully reduce living expenses. Child support received from another relationship and need-based public assistance are not counted.
Restricted Stock Units
RSUs and similar equity compensation come up often in California cases. When RSUs vest, they become taxable income at the share price on the vesting date, much like a cash bonus, and a Smith/Ostler order can assign a percentage of the value at vesting. Whether unvested RSUs are treated as future income subject to a percentage or as a marital asset to be divided in the property settlement depends on when they were granted, the vesting schedule, and whether they were compensation for past or future work.
How the Court Picks the Number
No statute fixes the percentage. In the original Ostler & Smith order, the court applied 10 percent of the gross annual bonus per child for child support and 15 percent for spousal support, adding up to 35 percent of the bonus. That structure gave the case its name and remains a common starting reference, but the actual figure in any given case is a matter of judicial discretion.
For child support, the key variables are each parent’s income, the percentage of time each parent has physical custody, and the needs of the children. The guideline formula in Family Code Section 4055 produces the base amount from stable salary; the percentage layered on top is meant to keep total support proportional to actual earnings.4California Legislative Information. California Family Code 4055
For spousal support, the percentage draws on the factors in Family Code Section 4320: the marital standard of living, the length of the marriage, the supported spouse’s earning capacity, the paying spouse’s ability to pay, each party’s assets and obligations, tax consequences, the balance of hardships, and the goal of the supported spouse becoming self-supporting within a reasonable time.5California Legislative Information. California Family Code 4320 No single factor controls.
A Worked Example
Say one parent earns a base salary of $12,000 per month and has received annual bonuses ranging from $30,000 to $80,000 over recent years. The court runs the guideline formula on the $12,000 salary alone and might set base child support at $2,400 per month for two children. It then adds a Smith/Ostler provision requiring, say, 18 percent of any gross bonus received. If the bonus that year is $50,000, the additional support payment is $9,000, due within 30 days of receipt. If the bonus is zero, nothing extra is owed.
High-Income Parents
When a parent earns substantially more than the children need, the guideline formula can produce a base number that looks more like a wealth transfer than support. Family Code Section 4057 lets the paying parent rebut the presumption that the guideline amount is correct by showing “extraordinarily high income” and that the formula amount would exceed the children’s needs.6California Legislative Information. California Code FAM 4057 In those cases, the court may cap base support and rely more heavily on a Smith/Ostler percentage to keep total support proportional to the children’s actual standard of living. The parent seeking the deviation carries the burden of proof.
Reporting and Verification
The percentage only works if the bonus is actually reported. A well-drafted Smith/Ostler order requires the paying parent to provide documentation of any bonus or commission within a set number of days after receiving it, with the additional support payment due shortly after. That usually means turning over a bonus pay stub, commission statement, W-2, or year-end compensation summary so the receiving parent can verify the number.
Both parents in a California divorce or legal separation already exchange detailed financial disclosures covering pay stubs, tax returns, and all income sources.7California Courts Self Help Guide. Share Your Financial Information Ongoing disclosure written into the Smith/Ostler order extends that obligation into every year the order remains in force. If the paying parent claims no bonus was received or understates the amount, the other parent can use discovery, subpoena employer records, or ask the court to compel year-end pay stubs and tax returns. Hiding bonus income can lead the court to impute income at a higher level, award attorney’s fees to the other side, or issue sanctions.
Tax Reality Behind the Percentage
The percentage in the order applies to gross bonus income, but the paying parent receives the bonus net of tax. Employers withhold federal income tax on bonuses at a flat 22 percent, or 37 percent on bonus income above $1 million in a calendar year.8Internal Revenue Service. Publication 15 (2026), (Circular E), Employer’s Tax Guide Between federal withholding, California state tax, Social Security, and Medicare, the parent may net only 55 to 60 cents on each bonus dollar before the Smith/Ostler percentage is calculated on the gross.
Support payments do not change that math through deductions. Since the Tax Cuts and Jobs Act, spousal support paid under agreements executed or modified after December 31, 2018, is not deductible by the payer and not taxable to the recipient.9Internal Revenue Service. Topic no. 452, Alimony and Separate Maintenance Child support has always been non-deductible for the payer and non-taxable for the recipient.10Internal Revenue Service. Alimony, Child Support, Court Awards, Damages 1 Courts are required to consider tax consequences when setting spousal support, but the gap between gross and net can still catch people off guard when the percentage is applied.
Changing the Percentage Later
Under Family Code Section 3651, a support order can be modified when the court determines it is necessary, typically based on a material change in circumstances.11California Legislative Information. California Family Code 3651 Because a Smith/Ostler order self-adjusts for normal bonus swings, a single bad year is usually not enough to justify modification. Something more lasting is needed, like a permanent change in compensation structure, a job loss, a shift in custody, or a child aging out of the order.
Timing matters. Modifications cannot reach back before the date the motion is filed. Arrears that accrued before the filing date are locked in and cannot be reduced retroactively. If your income drops and you wait six months to file, you owe the full original amount for those six months regardless of what you actually earned. If the parties agreed in writing that spousal support is not subject to modification, the court cannot change it; child support remains modifiable regardless of what the parents agreed to.