## Facts

- Carolyn Rae Welter and Larry Welter married in 1998, had one child, and divorced the following year.
- Wisconsin calculates child support primarily under a percentage-of-income standard based on the payor’s “gross income,” which includes salary and wages.
- After the divorce, a child-support order was set using the percentage standard.
- In later proceedings addressing support, a court commissioner determined Larry’s support obligation but excluded Larry’s overtime pay from his gross income.
- Carolyn sought review in the circuit court, arguing that overtime is part of gross income under Wisconsin’s child-support rules and cannot be removed by a general practice.
- The circuit court affirmed the commissioner’s approach and approved excluding overtime compensation from the guideline income figure.
- Carolyn appealed to the Wisconsin Court of Appeals, challenging the exclusion of overtime from the income used to apply the percentage standard.

## Issues

1. Whether, when applying Wisconsin’s percentage-of-income child-support standard, a court may exclude a payor’s overtime compensation from “gross income” as a general rule rather than first treating it as income under the guidelines.
2. Whether any reduction based on fairness concerns about overtime must be handled through the statutory and administrative deviation process supported by case-specific findings.

## Decision

- The Wisconsin Court of Appeals reversed the circuit court’s order.
- The court held that overtime wages are part of “gross income” for purposes of calculating child support under Wisconsin’s percentage standard.
- The court ruled that the commissioner and circuit court erred by excluding overtime through a broad policy choice, rather than applying the guidelines and then considering a deviation based on the facts of the parties’ circumstances.
- The case was remanded for recalculation of support consistent with the guidelines, with any departure from the guideline amount requiring proper findings.

## Legal Principles

- Wisconsin child support is generally calculated by applying the percentage standard to the payor’s gross income.
- “Gross income” for guideline purposes includes wages and salary; overtime pay is wage income and is counted in the guideline calculation.
- A court must begin with the guideline method; it may not alter the definition of gross income by categorically removing certain kinds of earnings to reach a preferred result.
- A court may set support at a level different from the guideline amount only after using the deviation procedure and making case-specific findings that applying the standard amount would be unfair to the child or to the parties, considering the factors identified by statute and the child-support rules.
- If overtime income is irregular, unusually burdensome, or otherwise raises fairness concerns in a given case, those concerns are addressed through a deviation analysis and written or stated findings, not by a blanket exclusion.

## Conclusion

Welter v. Welter required Wisconsin courts to treat overtime pay as part of gross income when applying the percentage-of-income child-support standard and rejected the use of a general practice that subtracts overtime before running the guideline calculation; any adjustment related to overtime must be justified through the deviation framework with findings tied to the parties’ specific facts on remand.


Welter v. Welter, 711 N.W.2d 705 (2006)