Tax implication of wife returning to work part time

As stated my wife is looking at taking a part time job (approx 15 hours a week @ EUR10 per hour). We are jointly assesed for tax as she has been in full-time unpaid work for the last 4 years (minding the kids). Other than home carers allowance, which I would assume we'll lose, what effect will it have on my / her take home pay. I pay at 41%.

Thanks

Emul

Have you tried using [broken link removed] to estimate the possible impact?

You may not necessarily lose the [broken link removed].

I have a similar question. Wife just started part time work, earning ~5000 p.a. I earn 65475 we are taxed jointly. Wife spoke to revenue and they said she had to pay 41% tax. She does get PAYE credit though.

I plugged in the figures into Karl Grabes tax calculator and got different answers. If using the numbers above:

48000 at 20%
22475 at 41%

If single earner on 70475:
43000 at 20%
27475 at 41%

Are revenue wrong or have I missed something?

gwangwangwan

gwangwangwan said:

I have a similar question. Wife just started part time work, earning ~5000 p.a. I earn 65475 we are taxed jointly. Wife spoke to revenue and they said she had to pay 41% tax.

Click to expand...

Maybe the 48K (43K married + 5K increment for both spouse's working) SRCOP is totally allocated to your employment and she is getting none of it? Perhaps you want to allocate "her" 5K SRCOP to her employment? Your statements of tax credits should clarify what way the SRCOP and other credits are split.

You will get the Homecarers allowance for the first year that she goes back to work, you only lose it in year 2. If your wife was in receipt of other benefits you may qualify for Job Assist Credit, worth checking out.

In relation to Cut-Off points, for married with one earning, it is €43k @20% and balance at 41%. If both working, it is 43k @20% with an additon of up to €25k for the second earner (restricted to the level of earning of the second earner) @ 20% so up to max €68k @ 20% and balance @ 41%. So for poster 3, the max is €43k plus €5k @ 20% and the rest at 41%.

gwangwangwan, if your wife earns less than €5080/year you are entitled to the full Home Carer Tax Credit of €770

based on the level of earning that you stated your wife will be getting you will lose it, and anyway, even if you don't, you get either the homecarers or the increased exemption, whichever is best, but not both.