After childcare, commuting, and the tax that hits the second earner harder, the extra income is often half what people think. Year-one net plus the career-capital long-run.
Gross income and tax position on the next slice of household income.
The marginal rate on the next slice, not the average. For UK higher-rate households, the second earner often faces about thirty-three to forty-two per cent.
Money spent that exists because the second earner is working.
Years until kids exit care, and the real return on career capital.
Negative year-one net. Career capital still usually wins long-run.
Illustrative figures only. Childcare subsidies, tax-free childcare allowances, and employer benefits differ by jurisdiction and household income; this model uses headline gross. For your specific situation, consult a qualified adviser.
Worth carries the household income calculation into the trajectory: year-one net, year-six relief, year-twenty career compound. Decide once with the full picture. Join the waitlist.
Household tax stacks. The second earner's first slice of income gets taxed at the household's marginal rate, not the basic rate. Combined with childcare costs that are not tax-deductible in most cases, the after-tax-after-childcare income can be a meaningfully smaller share of gross than the first earner sees.
UK Tax-Free Childcare contributes up to about two thousand a year per child if both parents work and earn under one hundred thousand each. The hundred-thousand cliff is brutal: a single unit of income over the cap disqualifies the entire household. Worth modelling carefully if you are close to the threshold.
Because the year-one number is misleading. Quitting for the maths and never returning to the trajectory often costs a six-figure sum over a working life. Even if year-one net is negative, the trajectory benefit usually dominates over a twenty-year horizon. The model bakes in a conservative twenty per cent of salary compounded over twenty years.
Sometimes. Reduces childcare costs and commuting, may preserve enough hours to keep promotion eligibility. The trade-off is that part-time often gets lower per-hour comp and slower trajectory. Worth running the calculator at both full-time and a part-time scenario.