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

[NameChangeBonus]

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?

Just because they are reasonably well off, doesn't mean they don't deserve to be treated fairly. The 100k cliff edge isn't fair... a tapering would be. Basing it on just the highest earner instead of household income isn't fair.

(There must be cheaper childcare though, most people can't afford £2k in fees a month for one child!)

Give it to a charity so it qualifies for gift aid, or open a personal pension and pay into there. Both better options than asking not to get it.

Ask for an additional one week of paid holiday (as a one off in lieu?)

it's an awkward situation to be in marginal tax rates can be really disheartening

Bloody hell, typical MN users who are jealous and bitter.

Someone is in a profession where they get paid more than you. Is it really that shocking? OP didn’t come on complaining about not being paid enough or struggling - she wants to make sure she won’t lose more by getting this bonus. What’s wrong with that?

Mature retort OP. Everything is relative. Congrats on your achievements to date

I’m sorry I used the words ‘quite tight’.
we have 1500 after childcare and mortgage and council tax:
350 - gas and electric
100 - furniture loan
100 - internet, phone bills, Netflix and prime
400 - food and household items, nappies etc
350 - commuting costs (petrol, car maintenance, insurance, train fares)
thats £1200

that leaves £50 per week for clothes, shoes any birthdays, xmas, ad hoc purchases, dentist extra food etc. also things like home contents insurance, repairs etc.

sorry if others don’t think this is right but it feels like it to us.

@TheIndecisiveElf

these are normal nursery costs for London nowadays for 5 days full time for 2 kids

The employer could make a gross one off contribution. Most pension providers should facilitate this without changing your existing arrangement.

Thats down to the various companies and the roles involved and also locations eg London, maybe people campaign for the same salary for every job, then no on can say omg they earn more than x.

Nasty, horrible comment. Why do you feel the need?

So how much should OP be earning?

Ask for a lower amount eg £3k instead, do the maths to check you're still just under the threshold

Any chance you can have more annual leave next year in lieu of the full bonus

Meeow 🐱

It's pretty toxic.

70% tax? So that OP, who presumably studied and trained for years to get to her level, racking up lots of debt, should get paid £10k more than you? How is OP meant to pay her children’s nursery fees and her mortgage? Why should she have even bothered with a career?

What a fab idea.

You don't need to apologise to unreasonable irrelevant comments re how you feel about your financial situation.
Try deferring your bonus to April.

This might be a better option, if they can do it

Your username and the nature of your posts suggests you’re just winding people up. So I will stop engaging with you.

then i advocated that the rich and super rich would use offshore accounts then maybe the rest of society will then be happy being equal ?

"we take home approx £7k between us. Over half is nursery fees, and £2k is mortgage and council tax (inside m25 but not an amazing area)."

Some people earn that in a year, and can't afford to buy a house at all. They rent in unamazing areas.

Another great idea. Time is far more precious than money once you have enough to not be worried.