The classic example is a person who receives a regular base salary but may also receive bonuses, commissions, or other variable compensation. Instead of trying to guess future bonus income and build all of it into one fixed monthly support number, the court can set a base support amount and then require an additional percentage to be paid if and when the variable income is actually received. California case law recognizes this approach for both child support and spousal support.
Why Courts Use Smith/Ostler Orders
The main reason Smith/Ostler orders exist is practical. Variable compensation can swing up and down. If the court simply assumes a large future bonus will always continue, the support order may become unfair when that bonus is reduced or never paid. The original Ostler & Smith case approved an escalation provision tied to future bonuses for that reason, and later cases explain that this type of order helps capture fluctuating income without forcing constant modification motions every time compensation changes.
For child support, this fits naturally within California's statutory framework because Family Code section 4058 includes bonuses and commissions in gross income, and Family Code section 4064 expressly allows the court to adjust child support to account for seasonal or fluctuating income.
How a Smith/Ostler Order Usually Works
In most cases, the order has two parts. First, there is a fixed monthly support amount based on the payor's more stable income, usually the base salary or some representative income figure. Second, there is an additional support provision requiring the payor to pay a stated percentage of qualifying bonus or commission income when it is actually received. That is the basic structure approved in Ostler & Smith, and later cases describe it as an additional award above the fixed monthly amount, expressed as a fraction or percentage of discretionary bonus income actually received.
In practice, many lawyers and courts also use a Smith/Ostler table or bonus table to make the percentage component easier to administer. The idea is still the same: the order separates regular support from variable-income support so the parties are not forced to guess what future bonuses will be.
Fictional Smith/Ostler Example
Assume a fictional agreed order provides base support of $1,500 per month plus 10% of covered gross bonus or commission income. Later, the paying party receives a covered $10,000 bonus. The illustrative additional payment would be $1,000: $10,000 multiplied by 10%.
| Component | Illustrative term |
|---|---|
| Base monthly support | $1,500 per month |
| Variable income received | $10,000 covered bonus or commission |
| Illustrative percentage | 10% of covered gross variable income |
| Additional support | $1,000 in this example |
| When calculated | After the covered income is received and the required reporting documents are available, with payment due by the deadline stated in the order. |
This example is for illustration only. It is not a recommended amount or percentage, and California does not use one universal Smith/Ostler percentage.
Smith/Ostler Is Not a Fixed Formula Set by Statute
There is no single statewide statute that sets one mandatory Smith/Ostler percentage for every case. The percentage depends on the facts of the case, including the type of support involved, the parties' incomes, tax assumptions, and how the court or the parties choose to structure the order. The concept comes from case law and from the broader statutory rules governing support, not from one universal fixed-rate schedule.
What Counts as "Bonus" or Variable Income Can Matter a Lot
One of the biggest issues in Smith/Ostler disputes is defining what income the percentage applies to. In some cases, the order refers specifically to bonuses. In others, it may refer more broadly to compensation above a certain base amount. That distinction can matter. In Marriage of Minkin, the Court of Appeal treated an Ostler/Smith provision as referring to discretionary bonus-type payments and emphasized that careful interpretation was needed when the payor later received different kinds of compensation not clearly contemplated when the order was written.
Likewise, in Marriage of Tong and Samson, the court dealt with a support provision tied to variable compensation and held that a one-time lump-sum severance payment could not simply be treated as though it were ordinary monthly compensation without further analysis. The lesson is that precise drafting matters. If the parties want the percentage to apply to bonuses, commissions, RSUs, deferred compensation, severance, or some other category of compensation, the order should say so as clearly as possible.
Representative Income Still Matters
Even when a Smith/Ostler provision is used, the court still has to decide what base income figure to use for the fixed monthly support. California appellate decisions warn against using a sample period that is too short or unusually high. In Marriage of Pletcher, relying on prior authority, the court emphasized that the period used to calculate income should be long enough to be representative rather than extraordinary. That same practical point often matters in Smith/Ostler cases because the base support amount and the percentage-based add-on need to work together sensibly.
Smith/Ostler Orders Can Apply to Child Support and Spousal Support
Although people often associate Smith/Ostler language with child support, the concept is also used in spousal support cases. The original Ostler & Smith decision itself involved both child and spousal support, and later appellate decisions continue to discuss Ostler/Smith-type provisions in the context of spousal support tied to bonuses or commissions.
Why Careful Drafting Matters
A good Smith/Ostler order should do more than say "pay a percentage of bonuses." It should define what income is covered, when the percentage becomes due, how the income will be reported, and whether supporting documents such as pay stubs, W-2s, bonus statements, or year-end compensation records must be exchanged. Many later disputes happen not because Smith/Ostler is a bad concept, but because the original wording was too vague about what counts and how the calculation should be done. The appellate decisions in Minkin and Tong and Samson both show how much can turn on the exact language of the order.
Smith/Ostler Drafting Checklist
An agreed variable-support provision should be specific enough to calculate and administer without relying on assumptions that are not stated in the order.
- Covered income: identify the bonuses, commissions, incentive pay, equity compensation, or other variable income included.
- Excluded income: state whether severance, reimbursements, benefits, one-time payments, or other categories are excluded.
- Reporting documents: identify pay stubs, commission statements, bonus notices, W-2s, tax forms, or other records to exchange.
- Payment deadline: state when the calculation occurs and when additional support must be paid after receipt of income.
- Calculation method: define the percentage, income base, gross-or-net treatment, thresholds, caps, credits, and rounding method if applicable.
- Disputes and reconciliation: explain how errors, later corrections, year-end reconciliation, or disagreements about covered income will be addressed.
- Tax treatment language: address withholding and intended tax treatment where appropriate, with tax advice obtained separately when needed.
Conclusion
A Smith/Ostler order is a practical tool for support cases involving variable income. Instead of forcing the court to guess future bonuses or commissions, the order usually sets a base monthly amount and then adds a percentage of qualifying variable compensation if it is actually received. The concept is well recognized in California law, but the details matter. The more clearly the order defines the covered income and the payment method, the less likely the parties are to end up fighting later about what the provision means.