Bonus may affect 30 free nursery hours eligibility, what are our options? 10k

[Kiwibubs]

Hi MN

out little girl will be starting nursery this August. My husband is on 100k and turndown a pay increase as it wouldn’t be beneficial considering the cost of nursery without the 30 free hours.

Today his boss told him they want to give him a bonus for all his hard work (he’s literally doing 4 different jobs for his company). Great that he’s been recognised for his hard work but looks like this could jeopardise the free hours.
It’s 10k given in 5k installments this month and again in 6 months time.

Does anyone have advice on what we should do? If accepted we’d end up having to pay 21k in nursery fees per year so seems pointless to accept.
Maybe his company could put the bonus in my bank account?

if anyone has had this issue and has a solution I’d love to know.

thank you.

I think this is a wind up. Anyone on £100k or nearing the £100k limit knows to add it to their pension. And obviously knows they cannot give a bonus to a partner! It’s just to get the fight around £100k enough to pay their own childcare vs the £100k cliff edge.

He’s on £100k and turned down a pay rise?? Does he not put anything at all into a pension?

How can you earn a 100k salary and still not figure out how to salary sacrifice a pay raise to stay below the tax threshold? Unbelievable.

It’s rage bait.

Thank you. I genuinely don’t understand why some people respond just to be shitty.

Where did I say we didn’t need the money?

Pension. Or give to charity!

Tbf, turning down a pay rise instead of taking it and putting it all into a pension for the few years your child is in nursery so that when your child leaves nursery you’re on a higher salary which will boost all future % based pay rises and new job salary negotiations suggests either complete foolishness, or not a great need for money.

Other than pension is there any other salary sacrifices his company offer such as share options/car purchase via SS etc? But yeah he shouldnt have turned down the pay rise just dialled up his pension contributions...

Tbf to the OP’s husband, there is so much chat about the £100k cliff edge that I think people don’t realise there’s a very straight forward response in the form of pension overpayments.

Thank you to those who responded with their own experiences. And thank you for the advice, very helpful. My husband only recently got a 100k salary and we’ve only recently had a baby.

Thank you for pointing out the salary sacrifice/higher salary on pension. My husband will have a chat with his company.

For those who simply responded to make me feel stupid I just hope you’re a little more tactful to those you know in real life such a friends/colleagues/family. 💓

Well maybe if he is earning that kind of money he has the brains to work out when he should be doing, without his wife having to ask mumsnet eh?

Yep bonus into Pension.

Salary sacrifice as much as you can into pension to drop below the threshold. Bear in mind that benefits in kind (e.g. those on the P11D) also go towards your income and need to be taken into account when calculating your net adjusted income. Don’t turn down pay rises - just get financial advice so you don’t lose out on childcare hours and tax free childcare.

Maybe tell him to read up on making the most of a high salary so he's not daft enough to turn down a pay rise again.

As long as you feel better for writing this that’s all that matters

If he is already paying into a pension then you may find the extra doesn't take him over the limit anyway. Or if he takes any other benefits, such as a company lease I think they may also be deductible (though I have to say I am not sure on this point.)

Definitely do the salary sacrifice into the pension. We’ve just split it half for us now and half for pension and the tax saved is significant (we’re well past childcare now at least).

Thank you to the really helpful responses 💜 much appreciated.

Worded it incorrectly but my husband didn’t give up a 100k+ salary- apologies for the confusion but for those who just came on here to tell me we’re stupid, daft or brainless as long as you feel better I’m glad I could accommodate you. 🙂

thank you for being super helpful x

You’ve said you don’t want sarcastic answers…

Isn't the salary sacrifice option due to end soon or was that for something else?

This shows how ridiculous the £100K cliff edge is though.

You shouldn't lose your tax allowance or your tax-free childcare. You will pay more in tax anyway.

Pay extra in pension or request more holiday instead of money bonus

Salary sacrifice straight into pension - plus you’ll get the tax and NI break on it. It’s what most people are doing earning 100-125k to avoid the 60% tax trap and loss of childcare, CB etc.

Tbf, it's pretty incredible that someone can earn 100k and not yet be aware of the pension option.

I salary sacrifice just to get me out of the HRT threshold.

Another option maybe (if allowed) he can do a 4.5 day week and earn £90k and have half a day caring for his baby