There’s NO point earning over £50k?!

[ThisReallyDoesntAddUp]

Because of the £50k child benefit limit and 40% tax rate!

So I earn £78,000 pro rata overall now with my job following a mid year pay rise. This includes bonus and car allowance. I work 4 days a week (80% equivalent) which brings the overall pay this year down to just shy of £50k with a £9.6k bonus.

Out of the £9.6K bonus due in March, I’ve worked out 40% will go to the taxman, over £2K will need paying back for child benefit as I’m now over the £50k threshold, and a further £800ish will go towards my student loan. Deductions of just under £6k!!! This means I’ll only take home 30% of my bonus?!

I’m now on mat leave for baby number 3. AIBU to make sure when I go back I remain under the £50k mark by reducing hours even further?! I’d then have less to pay in childcare mitigating the difference in the pay I’d receive working an extra day each week.

Its an absolute joke, I was hoping to go back to work after my last baby and push on hard with my career but what is the actual point!! I may as well work less hours, keep the child benefit and pay less in childcare!

Salary sacrifice pension? If you’re only nudging over £50k that - or other salary sacrifice - could easily take you back under

also I’d think about future career, if that applies to you . It may not be worth it now, but maintaining your position and progression at work is part of how you don’t fall behind

but going back part time sounds good too :)

There’s definitely a cut off there. For a long while DH ploughed extra money into his pension until his salary was comfortably enough the threshold to make it worthwhile forgoing the extras. It can be hard (yes, first world problems) if the thing that tops you over is an unexpected bonus.I understand (but have not experienced) the £100k cut off is even worse.

I’ve just had a big jump in salary from 45 to 70ish k and feel the same. Had worked hard passing professional exams and going extra mile whilst still trying to be a good mum and we feel stretched to max at home. I also have huge student debts. Partner also works very hard but earns less. It will have pushed me to 55k this tax year So will need to repay some child benefit and I’m wondering why I didn’t think to reduce my hours - especially as my nursery fees have jumped massively from 54/day 2 years ago to 74/day now. As a staunch labour supporter I get it’s probably hypocritical- I do support high taxation but not cliff edges like this. Honestly finding it hard to work the long unpaid hours and wondering why bother

My heart bleeds

i believe child benefit is simply gross not net adjusted which takes into account pension (tax free childcare is net adjusted at the 100k threshold!)

Voted YABU because you proved your title to be wrong in the OP. There isn’t no point to it. It is rubbish but you’re still better off than if you actually earned under £50k. But yes, putting more into pension is a good idea.

@Daffidale Thank you, I’ve actually done this for this year and asked for 100% of bonus to be transferred to my pension to get me under the threshold. It’s frustrating as I’m the main earner at home and we could do with having the money to hand 😬

stick all the extra in your pension. You will also get child benefit

Fill up your pension. Find out about any salary sacrifice your company does.

All those ‘my heart bleeds’ types…. Remember that well paid jobs are needed in society. Not everyone has the skills to be a CEO. The higher you get the longer you’re usually out between jobs/contracts as it’s a very different market. These people are paid well for a reason. More risk, more responsibility, more flexibility required. Envy is a sad thing.

I agree. DH recently got a pay rise (works 60 hour weeks and never sees us) so is now on around £54k.

I think we have to pay back child benefit so with the loss of that, extra tax,NI and pension I actually think we are worse off!

You don't pay all of child benefit back until you hit £60k.

Its still better to keep increasing your money than just limiting yourself to £50k

Great idea … just don’t bitch that you’re not gaining any ground and other people make more than you.

Very short sided and a self-fulfilling prophecy.

Child benefit is a sliding scale and you don’t lose it entirely until after 60ish k

Happy to swap?

Some people really don't know their own privilege.

See, this is part of why our public services are so crap, people earning plenty are dodging paying tax by sticking it in their pensions and hanging onto benefits they don’t need 🙄

Wait till you hit £100k….it gets worse!

Ohh how terribly awful to have a decent salary, work part time, make healthy contributions to pension and national services, AND get an extra 3k (after tax) bonus! You’re right, it is truly terrible, perhaps see if you can find a nice minimum wage, zero hours contract so you can keep your whole £20 per week child benefit and have all the excitement that comes with financial insecurity. 🙄

YANBU but this won’t go down well

You assume you can do the same job without any hesitation then?

Not really. High earners pay WAY more tax at every turn. They spend more - more VAT. They employ more services - paying NI and tax. They don’t use public services - schools/medical care.

Also, she’s allowed to say this. Presumably she worked very hard to be where she is in her career and for the promotion. It’s crazy that working harder results in little to no reward. I’m with you OP and I earn significantly less than you!

That's incorrect.

It's adjusted net income.

I do find it really odd how little we truly reward hard work.

Yeah she should just be happy with mediocrity. Always accept your lot. Never want to do better. It’s just the way. 🙄

To be fair you have chosen to have a third child. Not many do.