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!

I don't think you actually understand how taxation works. Hopefully you don't work in finance 🤦‍♀️.

Not really.

Post tax earnings on £50-60k = £5,182

2024-5 child benefit for two = £2,212

So you lose 43% of your additional earnings just because of the loss of child benefit.

A £10k payrise might mean less than £250 a month in your pocket.

Hmm I work full time and pay my taxes too! I just don't expect things I'm not entitled to.

Does anyone writing about these things stop to think about how someone earning 18/23k a year must feel reading it.

I know. Imagine what child benefit means to them. It’s give or take 10% of their gross income for two kids.

Not on his income tax...... that's his salary. Dividends and capital gains are income but not earned income - and therefore are not taxed under PAYE rules - CGT is 28% - Dividend Tax is 23% I think (could be less) - no matter how much you earn. There are more forms of income apart from earned from going out to work.

If you live in London and rent you might end up with almost the same take home money as op with your universal credit benefits and you'll be entitled to help with nursery fees which op won't have been

I earn a good wage so I don’t claim child benefit as I didn’t think it was worth the hassle, I may be wrong.

I am not sure why you are saying "not on his income tax"

I stated quite clearly and correctly that the Prime Minister pays a lower rate of tax on his income than teachers and nurses do.

Just because much of that income is in your words unearned, doesn't change the fact for some inexplicable reason unearned income is taxed less than earned income.

*Well not really inexplicable the system is designed to keep the rich rich and the poor poor.

As usual we’re all blaming the wrong people 🤷‍♀️ Tax wealth and leave people who actually work for an income more of their money. The Tories have us exactly where they want us - fighting over middle class salaries. Plus ca change.

That's vile. You have no idea of this person's work ethic or life circumstances. Say thank you? So they may have so many things going on in their life that they are unable to earn more but you want to belittle them by making them say thank you to those who have a better hand in life?

OP I have no problem with high earners and belive you should do what right for you in terms of what makes financial sense that still gives you a work life balance.

But some of the attitudes and comments on here are honestly disgusting.

YANBU but you'll get crucified here by people saying you know how privileged you are, assuming it was all served to you on a silver platter and moaning about their -much worse- circumstances, but not acknowledging that they also have the power to change their own circumstances but it's better to moan at others "privilege".

I think it’s even worse for single parent households with the thresholds for things like this. As 2 parents can earn under the £50k each and say have a combined income of £99k and still get the child benefit but one parent earning £50k would start to lose it.

It’s quite similar to being a single parent and deciding between full time work and the cost that goes with that for childcare and travel etc or cutting back to part time hours and getting topped up by UC/CTC to a similar income for a lot less stress.

Why are some people so salty 🤣
I'm on minimum wage myself but I do everything in my power to pay as little tax as possible
If I ever become a high earner, I will do the same
Like, why wouldn't you want to keep more of your hard earned money?
Companies barely pay anything and you crying about someone on less than 100k that's peanuts to some
Well done op
Definitely unfair and do everything in your power to better your life

How exactly does that work? So no high earners paying tax at 47% above £125k but yet there would be more money to pay those on benefits? Just as a matter of interest where do you think the benefits money comes from in the first place - magic fairy dust? A lot of high earners work in London - collectively London pays 30% of the UK's taxes! And the top 1% of earners pay 30% of the UK tax bill. So however you cut it - without a London or the top 1% - the UK would be down 30% on tax revenue..... so think carefully before you knock high earners they are the ones paying the most for benefits and the NHS..... otherwise the UK really is in dire straits. You do know most high earners paying marginal tax rates work in the private sector so the government has nothing to do with their salaries...... so quite how this would lead to more money being available for benefits etc - I have no clue!

I am glad we have moved on from trying to argue with the indisputable fact that Sunak pays a smaller proportion of his income in tax than teachers and nurses do.

If the company that was paying someone 125k and had for the sake of argument 7 employees that were on such a low wage that they also had to have benefits from the government then if instead that one person was paid 55k and the remaining 7 were paid £10,000 more they would perhaps not be in need of benefits.

the top 1% - the UK would be down 30% on tax revenue

It is good of you to demonstrate just how unequal incomes are in the UK.

@JessS1990 but you do know that the one person being paid 125k is paid that for a reason? It’s not just a random, right of birth thing? Where I work some people are paid that. They have programme and safety responsibility. They have years of experience and years spent getting qualified. They move locations at the company command. They work all hours of the day and the week. They would stand in court if a safety incident occurred. I am not paid 125k because I don’t do those things nor want to. It is facile to paint all high earners as overpaid, under qualified, not deserving their recompense.

Yes a lot coming off bonus but still more money coming in after deductions. It is hard earning over the threshold but pension benefit outweighs it. Xx

My dh has been hit with this at 50k?

A certain percentage of people might be lazy

The vast majority make logical decisions based on their circumstances

Another proportion couldn't earn more no matter how hard they tried - dependants, disabilities, etc

Privileged to work ridiculously hard, sacrificing a lot to be taxed to the hilt!

Some of it, yes. Not all. It gets removed in increments on pay between £50 and £60k.

The private companies I'm talking about where the majority of the workers are paying 40%+ tax rates - do not normally have people working for them who are also on benefits from the Government. And for interest - someone earning £125k income pays £42k tax and almost £6k in NI so call it £48k in total. Someone on £55k pays just under £14k in tax - the benefits cap for workers is £23k - so adding on 10k to your other 7 employees - (assuming they are all at the benefits cap - when in fact they are more likely to be under) - but let's be generous - that takes them all up to £33k - and taking the tax from that additional £10k - (given that the tax they pay on the £23k of £3300 is also built into the system - so it's just the extra you're talking about) - their new tax level would be £6400 - a net increase of £3100 per person - times seven = £21700 plus the £14k from the person who earns the £55k - and suddenly Government tax revenues are down - over £13k...... I'm not saying it's fair - am just saying that 1 person earning £125k - pays more tax than 7 people earning 33k each - so does this give you an idea of how much tax high earners pay!!!