Am I missing something?

mishelly

I have been working 30hrs a week in a minimum wage job for a while, kind of breaking into the industry, earning £9660 pa. I have the possibility of moving to a new position, working 40hrs per week but almost double the wage at 18,000.

My husband also works 24hrs per week and earns £9210.

To accept this new position we will need a small amount of childcare costing £80pw for our youngest child. (we have 3 altogether)

Having done all the calculations, I would be worse off accepting a job at nearly double pay and I was just wondering if this was correct or if I am incorrect in my calculations or have missed something.

Calculations as follows:

Current situation my wage -£9660 + hubbys £9210 + tax credits of £10747 = £29,617

Possible new situation
My take home wage on a salary of £18k is £15058 + hubbys wage of £9210 + tax credits of £7790 = £32058 but minus childcare costs of £4160 = £27,898

Does this seem right?

Contains_Mild_Peril

I don't know either, but can you clarify which of your figures are take-home pay and which are pre-tax? You seem to be mixing the two?

mishelly

The 9k wages don't have tax on them as they are below the threshold for it. The 18k would as it would be above, hence the £15058 take home used in my calculation.

It isn't a choice between full time and part time, it is 10hrs more, I already work 5 days a week 9-3 and my husband works evenings and weekends so our youngest doesn't have to go to a nursery. If I accept the higher job we will need childcare. I would rather spend an extra 10hrs per week with my daughter than pay someone else to do this especially if my family would be worse off, not only in time spent together but financially too.

marliepanda

Not sure how you can say you're 'breaking into an industry' if you don't want to accept a promotion

You'll never break into any industry if you stay with that attitude and stay on the bottom rung

Can your husband not take on more hours to help?

mishelly

I know, I really want to take it as it is a promotion but I think I was just surprised to find out that a promotion would mean less money!

I just wanted to check if I had this correct.

My husband has asked at work and they may be able to give him some but not guaranteed and not every single week so we wouldn't know till it happened.

marliepanda

This is why people don't like tax credits as it puts people off bettering themselves

Assuming this is all correct you'll run at a loss if roughly £1600? Why not cut your cloth, and the possibilities this promotion could lead to another promotion will hopefully mean an even bigger wage eventually.

I just feel if you stick with this attitude you'll always be on this same wage with no prospect of moving up

mishelly

Yeah, further promotion would be the end goal, I'm just seeing if I could afford to get there!

A £1600 loss wouldn't be too detrimental but it is other things that add up, eg I cant drive my older children to school and back so would have to get a bus pass each which is £350 each pa, also extra fuel is a consideration as the new job would be further away. Probably around a £3k loss altogether. It is something I will have to weigh up, this thread was just to check if I had the calculations correct, which it seems I do.

Jobseeeker

you need to think a bit more long term.

If you take this full time job it will lead to more promotions and pay rises etc. Plus what if your hubby gets offered a promotion/pay rise then you will think i wish i had taken that job then we would be much better off

It will be a short term dip in income but long term you will probably end up better off

karent_2

If your salary is going up by £8340 gross, then your tax credits will come down by 41% of that, ie £3419. You should be able to claim 70% of your child care costs(52 x 80 x 70%) ie £2912. So your tax credits would be £10747-3419+2912=10240.

Take home wage pay £15058 + hubbys wage of £9210 + tax credits of £10240 = £34508 but minus childcare costs of £4160 = £30348.

Not a great deal better off, but every little helps as they say.

FBaby

When you rely on tax credits, it does come times when you end up worse off. When my childcare bill came down (as my kids moved from nursery to school, hence needing breakfast and afterschool clubs), my tax credits went to almost nothing, so all in all I was worse off. It was frustrating, but instead of thinking that I would then reduce my hours to increase my entitlement to tax credits again, I instead felt grateful that being able to claim tax credits allowed me to go back to work in the first place. It's all about how you look at it.

I'm now almost done with paying childcare all together. My salary has increased nicely since and I am finally going to be richer at the end of the month. It was all worth it.