In California the technical description of the formula for Child Support is not easy to describe, but it is helpful for parents to know how certain factors, if used, effect child support outcome.
The calculation starts with the premise that both parents are liable to support their children according to their financial situation, taking into account the time sharing arrangement. In real life one parent ends up paying the other parent(s).
There are several simple calculators available on-line to help with simple financial situations. These calculators do not take into consideration all of the factors that can be attributed to a child support calculation, but in some cases they can be useful for ball-park estimations.
The calculation starts with each parent's gross income; in other words, the income before payment of taxes. Also factored into the calculation are the tax deductions (the home mortgage interest, etc.), dependency exemptions, tax credits, and tax deferred savings (such as IRAs). All of the above change the amount of money you have at the end of the year, by changing your tax liability. The calculation also acknowledges that the cost of Health Insurance is a necessity, not a luxury or an option. Each parent obtains a deduction for the actual cost to them for Health Insurance.
How do these factors effect a parent's liability to support their child? Simply put, if one of these factor decreases your tax liability it will put more money in your pocket at the end of the year. If you have more money in your pocket, that means that you have more money to contribute to Child Support.
For self-employed parents the 'adjusted gross' income, after legitimate expenses for their business is used. Tax deductions, such as depreciation decrease a person's tax liability and do not decrease the money in their bank account - therefore these are not 'expenses' necessary for the running of the business and they are not factored in the child support calculation.