High earner query - basically over 100% tax on xmas bonus.

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My employer has decided to be very generous and give everyone £5k cash bonus this Xmas (in previous years they have given £2k). I have adjusted my salary sacrifice pension contributions so I earn approximately £96k gross. I cannot amend this until April as per my employer policy. I thought there was enough buffer for bonus and benefits.

problem is if I earn over £100k (I have 2 kids aged 1 and 3 in full time nursery)

• I will pay 60 % tax on my bonus
• i will become ineligible for tax free childcare - worth £333 per month,£4k per year
• I will become ineligible for 30 hours childcare for DD1 - worth £600 per month, £7k per year.

basically because I’m getting this bonus we’ll be much worse off financially - is there anything I can do to avoid this?

The bonus for NJC workers of a one off payment of £1945, will affect a lot of people who's wages are so shit, that they also are in receipt of universal credit.

It's going to fuck them up monumentally.

Some councils have agreed to staggering payments. Maybe this is an option for you?

I am so sorry for your massive mortgage, 100k salary and 5k bonus.

Must be so hard for you. Especially with your husband's second income.

Look at a sipp. I'm a low earner and universal credits discount my contributions into sipp as income. Perhaps same for tax

The bonus for NJC workers of a one off payment of £1945, will affect a lot of people who's wages are so shit, that they also are in receipt of universal credit.

It's going to fuck them up monumentally.

Yep! Can complicate things for student loan repayments too.

What happened to being kind and actually helping ?

If only there was a money matters board or a childcare board in which this question had been answered a million times already.

Pension top up.

But sometimes, if you have specific information and it's a lot faster than rereading older threads?

They absolutely can ask. But to claim money is "tight" for them will cause the thread to go exactly the way it has, it happens every time.

Why are you making this thread about you?
Those are your choices. Why do you feel it necessary to criticise the OPs choices? She wasn't asking for an opinion on being a working mother.

Explain to your boss that going over the 100k will mean you lose your 30 hours of childcare. We had this for years, my DH actively turned down projects at the the end of the financial year because earning 101k will mean we lose the nursery hours, but earning 99k means we don’t.

Could you ask to have it in cash?

I get a £2 a year Xmas bonus (usually in the form of a Terry's choc orange). I'm in the NHS and our Trust is unusual in giving anything at all.
Someone came up with the idea of giving cash instead (to cover those with diabetes or dairy allergies), then someone else said it would be lovely to collect the money for our hospice instead, so that's what happens 🤩
I'd faint on the spot if I got £5k.

Extra pension is the answer here. I was in this situation for a few years and it's bonkers but at least with additional pension contributions you will (eventually) benefit from your hard work. Setting up some sort of personal scheme (assuming additional contributions to your work scheme aren't easy) will give you the flexibility to manage this each year.

Added bonus is that you'll get a tax rebate on the additional contribution, which will wind up the bitter mob even more!

I believe DinoDaddy married a sugar daddy and is a SAHM.

So many jealous and bitter people here

Nah. Just people who, if they picked up £7k a month, would not be on here moaning about a £5k bonus fucking up their free childcare.

As someone else said, read the room.

Regardless of who earns what, is there a requirement that anyone over a certain amount cannot ask for advice?

There appears to be a rule that over a certain amount you can’t ask for advice because you know “read the room”. Of course this ignores the fact that in the race to the bottom globally some people will be suffering much worse than anyone who posts on here so where does that leave us?

Reminds me of the covid threads, I think the end result was you couldn’t complain without attracting criticism unless you actually died from covid 🙄

And MNs users are meant to be educated 🤔

Yes this. Or if shares are an option ask for those instead?

I can understand that, but if you're in, for example, central London, etc., then various costs would be higher. Hence, the 'tight' comment. Surely, people would understand that one person's 'tight' is another person's 'omg, how much do you earn?' But then, as listed, it's all the costs, etc., that soon eat up the wage.

It is absolutely ridiculous to suggest that a woman should have given up a £96k salary to be a SAHM because of nursery fees. The nursery years are brutal but short in comparison to your career.

Could you ask for some of it to.be paid directly into your pension? That would be best way.

I think one of the issues is that other people
in the SE don’t earn anywhere near as much. I moved away from there as I couldn’t even afford to rent. I have friends with young children who still live there and their living conditions are awful because they are on minimum wage, so the issue wasn’t the tax question, but when someone says they’re struggling and they’re earning around five times as much as others living in the same place some people find it a bit difficult to hear. Especially when you get goady posters saying how tough things are after they’ve paid for private school.

I’m not saying the above is how I feel. There is nothing wrong with the OP’s question nor should she feel bad for being a high earner, thank god for higher earners and high tax payers. And the system is a mess, it’s crazy that even higher earners pay less and it’s absolutely disgusting that certain businesses pay no tax at all and if you’re cross with the OP for being a high earner and wanting to not hit this tax bracket then I certainly hope you don’t buy from Amazon or Starbucks as it’s companies like those that are absolutely pissing all over the system.

I just wanted to explain why some posters might find the wording a little difficult to hear.

As someone else said, read the room.

🙄

All of those were choices though.

Please use a financial advisor rather than ask on AIBU on mumsnet.

yes but in London area it's not uncommon for households to be in this kind of bracket. one of the reasons house prices are so high.

My partners job is based in zone 1. Our joint income is about £50k pa. Believe me, I know the costs. But we manage so I'm sure op will be fine. I'm on the eye rolling side of this argument and always will be.