Income shares vs percentage of income vs Melson

Every state’s child support guidelines answer the same question: how much of each parent’s income should go to the children when the parents live apart? The main models answer it in different ways, and the differences matter most in exactly the cases where families argue: when the receiving parent earns a good income, when one income is low, and when time is shared.

This guide runs one family through each model with computed figures. Parent A earns $60,000 a year, Parent B earns $40,000, and their two children live mainly with Parent B. For an overview of where the models are used, see how child support is calculated.

Income shares: one budget, split by income

The income shares model treats the children as having one budget that both parents fund. The North Carolina guidelines describe it plainly: child support is a shared parental obligation, and a child should receive the same proportion of parental income they would have received if the parents lived together. A schedule, built from economic research on family spending, gives the amount for the parents’ combined income and number of children.

The arithmetic is short. In North Carolina, the parents’ combined gross income is $8,333 a month. The schedule amount for two children at that income is $1,760. Parent A earns 60% of combined income, so Parent A’s share, and the guideline amount, is $1,056. Parent B’s share is assumed to be spent directly on the children.

Income shares is the most widely used model. Among the jurisdictions this site covers, 41 use a version of it, though their schedules, income definitions and adjustments differ.

Percentage of income: a share of the paying parent’s income

The percentage model skips the combined budget. It applies a fixed percentage, set by the number of children, to income. Wisconsin’s administrative rules state the assumption behind it: the standard expects that the custodial parent shares income directly with the children.

Versions differ in what the percentage is applied to:

• Paying parent’s net income. Texas sets child support as a percentage of the paying parent's monthly net resources: 20% for one child, rising to 40% for five or more children. The other parent's income doesn't change the guideline amount. For our family, Parent A’s net resources are $4,199 a month, and 25% of that gives $1,050. The percentages are set in Tex. Fam. Code § 154.125.
• Paying parent’s gross income. Wisconsin applies 25% to Parent A’s gross income of $5,000 a month, for $1,250.
• Combined income. New York's Child Support Standards Act applies a percentage to the parents' combined income: 17% for one child up to 35% for five or more. The paying parent pays their share of that amount. Our family’s guideline amount there is $13,853 a year, or $1,154 a month.

The New York approach is a hybrid: it uses a percentage, but divides the result by income share as an income shares state would. Among the states covered here, 7 use a percentage model: Alaska, Mississippi, Nevada, New York, North Dakota, Texas and Wisconsin.

Melson: needs first, then a share of the rest

The Melson formula is the most layered of the models. It protects each parent’s own subsistence, covers the children’s basic needs, and then shares part of the remaining income with the children through a standard of living adjustment, often shortened to SOLA. Among the jurisdictions this site covers, it is used by Delaware, Hawaii and Montana.

Hawaii uses a Melson-type formula. The children's primary need ($455 a child plus child care and health insurance) comes first; a standard of living adjustment then shares part of the parents' remaining income with the children. Each parent's part follows their share of the parents' combined net income. Each parent’s net income comes from Hawaii’s Table of Incomes, which deducts taxes and a self-support reserve of $1,693 a month, so it is lower than take-home pay.

For our family, the net incomes are $1,839 for Parent A and $787 for Parent B. The primary need for two children is $910. The standard of living adjustment adds $963, which is 20% of what is left of the parents’ combined gross income after a set-aside for each parent and the primary need. The total, $1,873, is divided by each parent’s share of net income. Parent A’s share is 70%, which makes the guideline amount $1,311.

When the receiving parent earns more

The models part ways most clearly when the receiving parent’s income changes. Raise Parent B’s income from $40,000 to $80,000 and keep everything else the same:

• In North Carolina, the guideline amount moves from $1,056 to $917, because Parent A’s share of combined income falls.
• In Texas, it stays at $1,050, because only the paying parent’s net resources count.
• In Hawaii, it moves from $1,311 to $991. A higher combined income raises the standard of living adjustment, while Parent A’s share of the total falls.

Neither direction is “right”. It is the clearest practical difference between a model that divides one budget and a model that takes a share of one parent’s income.

Strengths and criticisms

Each model reflects a judgment about fairness, and each has reasonable defenders and critics.

Income shares. Supporters value that it counts both parents’ incomes, so a receiving parent who earns more takes on more of the children’s costs, and that the schedule is tied to estimates of real family spending. Critics point out that those estimates rest on assumptions about intact households that may not fit two separate homes, and that the worksheets are harder for parents to check without a calculator. The schedules also go out of date between reviews.

Percentage of income. Its main strength is predictability: a paying parent can estimate support with one multiplication, and orders are easy to review when income changes. The common criticism is the mirror image of income shares: in versions that look only at the paying parent, the receiving parent’s income makes no difference, even when it is much higher. Flat percentages can also bear heavily on low incomes unless the state adds a low-income rule.

Melson. It is designed to make sure neither parent is left below subsistence and that the children’s primary needs come first, while still letting children share in a higher standard of living. Its complexity is the usual objection. It needs more inputs, more steps and more state-specific figures, which makes results harder to explain and verify.

All of the models adjust for shared parenting time, health insurance and child care in their own ways, so the comparison above is only part of the picture. The parenting time guide covers the time adjustments, and what counts as income covers the income definitions that feed every model.

Comparing states for your own case

Model labels are a starting point, not a forecast. Two income shares states can produce quite different guideline amounts for the same family, and a percentage state can come out above or below either of them depending on the incomes. The only reliable comparison is to run the same facts through each state’s rules.

The child support calculator does that for every state it covers, each state page explains the model and its adjustments with computed examples and links to the state’s official worksheet, and the guidelines by state table compares every state’s model side by side. Courts can deviate from the guidelines, so treat any figure as the guideline amount for the facts entered, not as a prediction of an order.