Going from one wage to two

The_Milkman

The milky. :beer:

McKneff

If she earns £100 a week then no tax is payable, also no NI is payable.

Her tax allowance (at the moment) would be £7475 per year, that goes up to £8K plus in April.

Sorry cant help with the other query

Say the tax allowance in the new year is £8100, then divide that by 52 and you get the amount she can earn without paying tax. (sorry I dont have a calc. to hand.

jackieblack

Try this, using the information you expect to be true when your wife returns to work

cte1111

Your wife won't need to pay tax or national insurance if she earns £100 per week.

Tax credits - it's hard to tell but I've read that you roughly lose about 1/3 of your extra earnings, e.g. you would lose about £33 a week from your tax credits.

Mojisola

She will still get NI credits towards her pension until the youngest is 12, won't she?

McKneff

She will if the Child Benefit payment is in her name.

The_Milkman

Thanks for all your replys. It seems that it will be worth going back to work then.

SkyeKnight

Your tax credits will be reduced by 41% of her income. No tax or NI on that income. The first year you will be assessed for tax credits on your previous years income so won't lose any tax credits.

Murgatroyd21

The_Milkman wrote: »

Hello, I need some help with the calculations that are involved with my wife going back to work after 10+ yrs out of the workforce (Rearing our kids).

I am employed as a milkman and receive a monthly wage which equates to roughly 10k per year (Yes we are very poorly paid) for a 30 hour week. we as a family receive tax credits of roughly 14k per year and another 3k in family allowance (or whatever they call it nowadays) We have 4 kids of school age and our youngest is starting full time is September so the wife will be looking for something that suit school hours etc.

She will be looking to work part time probably for minimum wage so she can expect to earn around 100 pound a week for 16 hours work....Now to my question.

If she earns 100 before tax etc then how much can she expect to be taxed and also how much would we expect to lose from our current tax credit payments. Now obviously we expect to be better off but it would be nice to have a guide on what we can expect to be better off by.

Many thanks

The milky. :beer:

If 2011/12 was a total gross income of £10,000, and your wife will get £100pw from September in the 2012/13 tax year, for tax credits they will use the 2011/12 income. Your award would be about £278pw.

The higher income won't come in to the calculation until 2013/14.

Could be different if you have to use any childcare/after school clubs.

Mojisola

If you do end up with more money coming in, have you thought about putting that away in a savings account? You can carry on living on what you're used to but will see a steady growth in savings.