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?

I would ask to have if split between the lowest paid staff or ask them to donate it to a struggling local kids or animal charity.

@Blanc4 Well of course you could afford to stay at home. Plenty of mums can't. Easy to stay within your means on £80k isn't it?

Well yes but common sense with how expensive it is to wait for some funding before your next one comes along.

The ops post would still be valid for 1 dc though.

Why does MNHQ allow comments like this to stand?

• offers zero help to op
• actively nasty

I see arseholes are out in force.

You don’t have to apologise and you don’t have to explain your outgoings OP.

This is solvable by additional pension contributions, charity or unpaid leave/buying additional holiday.

This is why you should never post about income on mumsnet - you will be asked to breakdown and justify every penny so that people can judge and decide whether you are actually worthy of asking a question or not.

You USED to be able to get a bonus in vouchers - not something that can be easily converted to cash but years ago my boss got round tax awkwardness by giving us £2k in vouchers for any shop we asked for that he could manage.

Most people asked for John Lewis IIRC.

You may still be able to do that?

Haven’t RTFT but this article this morning a useful read

Why a £1 pay rise may cost your family £10k

https://www.thetimes.co.uk/article/585794a0-d5cb-482f-9ae7-b86c020405b6?shareToken=9e496f100bbf2bdf551d71d31a0286a0

People on here are being unbelievably rude to someone fortunate enough to be a high earner. They probably started working a few years after others, getting qualified etc.

We should be supporting each other not tearing each other down.

For the record, I'm retired but wasn't a high earner, just content with my lot.

The massive cliff at £100k for things like free childcare hours is so crap, I'm sorry. It's a terrible system. I'm also so sorry you're getting negative comments on here. We should be celebrating success not criticising it. It's a bad system in many ways, not least because it disincentivises people like doctors or contractors for doing extra hours that would take them over this cliff, which we would all benefit from in terms of the additional productivity.

I would speak to payroll etc now and see if you can get it paid directly into your pension, otherwise simply ask for it to be reduced or not paid at all. It obviously isn't worth getting a £5k bonus that costs you £11k and leaves you £6k worse off, so I'm sure your company can understand that and make allowances/arrangements.

Ask your employer to give it to your local food bank as a corporate charity donation … they would receive it tax free and can you imagine the joy it will bring !

I had hoped that in 2023, women would stop saying " Well, just stay at home then, or get your DH to stay at home. It's so satisfying". Or posts on how low your salary and bonus is ( that's on you, not the OP).

But no. As for reading the room, we should be looking at the insane cost of childcare and housing and the unfair tax burden, not blaming educated, high- earning women for using their brains. OP could have asked in Money Matters, yes, but why should she? Because it makes a bunch of envious women feel bad? Sod that.

So many Jealous Janets come out as soon as someone is earning more than them.

Grow up. That's the kind of response that would come from an 8 year old.

If there are posters who feel upset or triggered reading posts by high earners then the answer is to not click on a thread that is clearly about someone on a high income.

The sneering and jealousy directed at the OP simply because of her salary is ridiculous and bizarre.

If you are angry with the OP because you are struggling on a fraction of her salary you need to redirect your anger. Your quarrel is with your employer and with a government that effectively subsidises companies that generate billions in revenue but refuse to pay their employees liveable wage.

She has a huge childcare bill plus the other costs that come with living in SE. I completely understand why £100k+ might not mean her family is living in the lap of luxury and why she would be concerned about be Impact of the bonus.

Our London household income is similar to OP’s but it was only once childcare costs reduced when DC started school (at one point we were paying an eye watering amount x2 for just 4 days a week) that we had breathing space. It was our choice to have children so I’m not expecting anyone to get the violins out. But London is expensive so while I recognise my good fortune at earning above the national average, my income here just doesn’t go as far as it would elsewhere in the country.

That’s what we thought but that’s what they said when we did our reconfirmation (we had a phone call because the run rate of DHs salary puts him over the threshold so they wanted to speak to us before reconfirming)

Sorry OP, I gave up reading replies after page 5 because of all the horrible, bitter bitches, so not sure if this has already been discussed.

Presumably you're not the only one teetering near the 100k threshold and others will be affected. If you make your employer aware of the issue they might be willing to put something in place like ability to pay bonus straight into pension or exchange for extra holiday or whatever.

Sorry you've had so many shitty responses. It's a shockingly unfair and punitive system.

I have not read everything. I earn a good salary but not as high as OP.

I think you can solve this (good) problem easily by either / both

1. Opening a SIPP and taking down your net income below the limit
2. Gifting to charity.

You may have to complete a tax return but its easily done if your tax affairs are otherwise simple (and if they were not you'd be doing one anyway).

Brave coming on here to ask stuff like this, anyone who dares to earns more than minimum wage on a zero hour contract shovelling shit in here it brings all the spiteful and jealous arseholes out of the woodwork who think you must be stepping on the backs of the downtrodden to earn what you earn. It's pathetic really.

I’d be very surprised if they won’t let you put the bonus into pension for exactly this reason. Ask HR. If they won’t and you can’t adjust your pension this tax year, open a personal pension and put the money to take you down. A lot of confused advice on here, this is totally legitimate way to stay below £100k. You’ll need to do a self assessment to reclaim the tax but it’s really quite straightforward

Here's the thing I don't understand if these employers can afford to pay bonuses why are working people claiming UC?

this money comes out of the public purse so why can't employers pay a living wage instead of working people relying on benefits.

The anger is misplaced. Instead of getting angry at the govt for not giving enough benefits why don't workers campaign for better wages. They keep their profits and the public are angry they don't get enough in benefits. The mind boggles.

No it isn't 'quite tight'.

My local community shop aims to feed a family of 4 for about £40.

OK so someone having so little is 'very tight' but you are earning well and have more for utilities, bills, food, commuting etc than a lot of people bring home from working full time.

I'm a top rate tax payer and these threads drive me nuts (ditto other threads talking about the hardships of six figure salaries).

I assume that anyone hitting the six figure threshold has the education and the nouse to read HMRC clear and simple guide on this and the fact that the OP has already increased her pension contributions shows she is aware of it too. She could also donate it to charity through payroll giving (also deducted before tax).

Anyone on a six figure salary is in the top percentage of earners. All the lower earners have childcare/rent and all the other costs to bear as well. Its depressing how self absorbed some people are that they think they are "struggling" on high salaries apparently oblivious of how well off they really are.

In other news; please give more money to the NHS/teachers/doctors/nurses/benefits/infrastructure - tax the rich! No, I didn’t mean me; I’m not quite rich enough… FFS.

We got a bonus recently and had the option to put it straight into our pensions. Otherwise try donating to charity.

Talk to payroll, they might be able to sort you out. Good luck!