# doing the figures - Can we afford one of us to give up work.



## bigjoe_dub (30 Dec 2006)

myself and the wife now have 2 kids.  one 5 and one 3 months old.  we are doing the figures to see if it is worth her while going back to work after her maternity leave.  if she does we will have creche fees for number 2 and after schools fees for number 1.  i reckon these fees would be approx €1300pm.

we have done our monthly budget based on bills going back a year.  now my main question is how much extra per month approx  would I take home if she gave up work and transferd her tax credits to me.  at the moment she is on €48k and I am on 58k.  although married we are kept out tax credits seperate.

my thinking is if the difference between her going  back to work and paying childcare and her leaving work and saving on childcare but loosing her salary is not that great then why bother.

many thanks.


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## Marie (31 Dec 2006)

One thing lost by your wife giving up work whilst the children are young is that gaps in her and her employer's contributions to state and contributory pension will result in a lower income in later years.  Might she also have to repay salary paid her during her maternity leave?  In most places the requirement is the woman must work for a minimum two further years or repay the maternity pay (but that might be specified in her contract).


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## Bgirl (31 Dec 2006)

A lot of employers don't pay whilst on maternity leave.


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## kjf (31 Dec 2006)

Joe,

What you will get if you elect for joint assesment and your wife gives up work will be the full married credit, 1760 X 2, and your own PAYE credit also 1760. If your spouse gives up work her PAYE credit is not transferable. She can then claim, the home care tax credit I cant find the figure right now I think its in the region of €800 (open to correction here). Your rate band wil be increased to €43,000 which means you can earn thats at 20% all above that at 41%. If your wife was to continue working she can earn also earn €25000 at 20% along with your €43,000 but she couldnt get the home carer credit. Visit Revenue.ie and in search box type Budget 2007, you can find the summary there

Cheers


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## RainyDay (1 Jan 2007)

Run the numbers through [broken link removed]


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## Brendan Burgess (1 Jan 2007)

If your wife, works this is how I calculate the extra net income you will get:


         Extra income:    48,000 

         Additional 20% rate band: 23,000 

   Employee tax credit              1760


   The additional tax paid will be:
   23000 @ 20% 4600
   25,000@41%10250
   Prsi @5%       2400
   Ee tax credit 1760
   Total 15490

   So the increased income will be €32,500 ( 48,000 – 15,500 )


As your income is above €41,000, I don't think you qualify for the Home Carer's Tax Credit


Does your wife have other benefits apart from gross pay? The most significant would be pension contribution. 


Brendan


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## orka (1 Jan 2007)

Brendan said:


> As your income is above €41,000, I don't think you qualify for the Home Carer's Tax Credit


 
The €41K limit only applies when the couple are *dual* income with one income (the homecarer's) less than the €6,020 earnings limit. If there is only one income, the home carer's tax credit is due regardless of the size of the single income.  I used ROS offline and the homecarer's credit comes through with a single income in excess of €41K.


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## Brendan Burgess (1 Jan 2007)

Thanks Orka

So your increased income is €31,700 (32500 -770)

Brendan


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## bigjoe_dub (3 Jan 2007)

Brendan, many thanks for those calulations but I think I may have explained myself wrong.

at the moment we both work.  If she gave up work completly and her tax credits are transfered to me what increase to my monthly salary would I get. (approx)


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## RainyDay (3 Jan 2007)

bigjoe_dub said:


> at the moment we both work.  If she gave up work completly and her tax credits are transfered to me what increase to my monthly salary would I get. (approx)


If you run the figures through the tax calculator I linked to above, you'll get your answers.


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## Trish2006 (5 Jan 2007)

We worked this one out before, have one kid now (1 yr old), thinking about second.  Salaries aren't too different from yours, a few grand less each.  Figured approx €300 - €400 extra in hub's monthly paycheque.  Can't remember the calculations off hand but this is the figure we've always used.  And the answer is I'd be working my full time job with 2 hours commuting a day, seeing kids for 1 hour a day for about €200 - €300 a month, which in my opinion is well not worth it!
Don't forget to factor in things like deli lunches, commuting, lunchtime shopping, work clothes, etc. - it all adds up.

Part-time is the solution, but it isn't that common in my line of business unless you current employer offers it and mine won't.  So it could be the end of my career but I have to admit that I couldn't care less.


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## Bob_tg (5 Jan 2007)

If you have a second car, it might be worth considering ditching it.  This could swing the difference.  Also, if your husband has the opportunity to do some overtime (if he gets hourly work) or a nixer (if he's on a salary).  Between ditching the 2nd car, and a little extra work from him, you might be ahead!


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## bigjoe_dub (8 Jan 2007)

thanks Trish2006  and the rest of you. 
still doing the sums.  have asked the firm that does our payroll if they can do a simulation payroll run for me to give me an exact figure.  Will let you know what I decide.


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## paddyd (20 Jan 2007)

we've also been in this situation recently. (first child born a few months back)

similar salary levels as above.

I got our CFO to check it out, and nearly had a heartattack when I saw how much LESS we would be bringing in each year.

Lets say my wife took home 2k per month after tax. the extra I would get each month after tax would be about €400. A drop in after-tax income of about €20,000 per year!! )

(but the creche fees alone would be 12months * (1k * 2 children) = €24k)

Therefore, the only way we could justify it would be to only do it if we have a 2nd child, and BOTH are in the creche at the same time (i.e. 2k p.m payments on that alone). Only then does it make sense. And only until the first child goes to school, then she would have to go back to work again.


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