Cost of going to work

PrideandLuna

I’m just wondering if anyone can explain to me how they juggle wages with the coat of childcare?
I’m in my 30s and have a 2yo. I have given my husband my tax free allowance so my earnings will all now be taxed at 40%? He earns 40k pa.
I have priced local crèches and they range from €1190-€1250
I have a business degree and 10 years work experience but in a fairly niche industry- very few jobs atm. I have been looking at jobs that suit my skill base and they are all advertised most are about 30k some up to 40k all are about an hour commute there and back (I only mention it as a cost)

My husband wants me to go back to work so that we can be more comfortable financially and obviously in case anything happens to his job. I love staying at home but I also miss some of the benefits of working socially and having my own money of course!

But honestly I’m struggling to see how i would be left with anything at the end of the month?

Am I missing something? Surely everyone isn’t out there working for nothing...
Is there more tax relief that i would be entitled to?

bee06

Might be worth calculating what your total family take home pay will be if you go back to work and if you don’t using the below calculator so you can properly compare.

You will have a personal tax credit which you can’t transfer to your husband as well as a portion of the standard tax band so your full wages won’t be taxed at 40%.

You will lose the home carers tax credit which you should be claiming for now.

http://services.deloitte.ie/tc/

Wildly Boaring

The idea of giving all your tax free allowance to your husband went out ages ago.

Ye actually benefit very little by using all credits for one person

eg on 70k he would take home 50k
Both of ye on 70k take home 93k

Basically the government wants both partners working and gives very little relief to a single income between 2

Cash_Q

You can contact Revenue and ask them to share your tax credits in the most mutually beneficial way, instead of just giving them all to him. I earn 20k more than my husband does so some of his unused credits are allocated to me, but he still has plenty of his own plus a buffer in case he gets a pay rise.

Childminder in their own home can be cheaper than creche it's worth looking into, although a colleague of mine pays less for creche than we do for a minder as she has a tax credit that we can't use towards a minder. Some I've spoken to seem to think we pay a lot for our minder but it translates to roughly 5euro per hour, I couldn't really pay less.

If you go back to work you need to rebalance your tax credits and rate band. It depends on how much you earn but in the simplest terms if you are earning at all you should take back all your tax credits from your husband and if you are earning over 35300 you should take back all your rate band also.

Your husband will pay more tax but you will pay less.

Milly33

I dont get it either to be honest with you. How people afford to go back to work, middle class that is.. My husband earns to much (probably 20 euro) over budget to get anything. It has always been the same case. Think from what we have seen if your on fairly low wages perhaps or claiming non stop then it might be of benefit but if you are middle class then it just doesn't work out.. Unless of course you yourself really want to go back to work.

whiskeyman

That seems high end creche fees.
Check if your husband's company offers help in childcare. Some larger companies have group scheme deals with the creche chains.
Be sure factor in other costs like travel, as you mentioned, and quality of life. You may need to take a hit now, but be ready to go back to work when school comes up.

Best of luck.

lazygal

Honestly we look at it as family income. So while I'm personally not coming out with a lot after childcare for three overall we're OK. And I have seen numerous women struggling with returning to work after a couple of years at home. I wanted to stay home after my first but went back and I'm so glad I did now. Staying at home would have cost me a lot financially and professionally and personally.

fits

lazygal wrote: »

I wanted to stay home after my first but went back and I'm so glad I did now. Staying at home would have cost me a lot financially and professionally and personally.

Me too. It broke my heart to leave them at 13 months. I went back 3 days a week initially, then 5. Now Im doing 4 closer to home which is a good balance I think. Its very difficult to get back into workforce if you are out for an extended period of time.

lazygal

While there is a cost to working, there is IME a far bigger cost to not working.
My mother hated going back to work and it was always a juggle until we were in our teens. However now she's of pension age she's gotten a lump sum and her pension every month and has always had that financial cover of not being totally reliant on my father's income and career. That's been a massive influence and motivator for me to stay in paid employment.

lashes34

You need to do the calcs and see what you would be up by you going back to work, include travel costs minus childminding costs and see if the extra is worth going back. Your own earnings wouldn't be all at 40%, you will have 1650 PAYE credit along with 25000ish at 20%. Do take your own credits and cut off back though if you go back so you are getting the most net pay you can.

Any cut off or credit left over can be transferred to your husband but I wouldnt be sacrificing all.

fits

Taxcalc.ie is a good tool to run a few scenarios

rainbow kirby

lazygal wrote: »

While there is a cost to working, there is IME a far bigger cost to not working.
My mother hated going back to work and it was always a juggle until we were in our teens. However now she's of pension age she's gotten a lump sum and her pension every month and has always had that financial cover of not being totally reliant on my father's income and career. That's been a massive influence and motivator for me to stay in paid employment.

Agree with this. I went back when my second child was 6 months old and I regret nothing, even though it's been really hard. I've always hated the idea of being dependent on anyone, even my husband.

jlm29

And it’s short lived. Crèche costs will start to go down next year with ecce, and then school.

ncmc

It can be very dispiriting when you go back to work first and find you’re pretty much paying for a child minder. As others have suggested, could you look for a lady who minds kids in their own home? I pay €55 for two children to be minded (5 and 2) and she treats them like her own grandkids. While I loved being at home with the kids while on maternity, I don’t think I’d like to do it full time, while work can be a pain, I like the social aspect it gives me and a chance to use my brain. Would it be an option to work 3 days at first? I work 4 days a week and my husband works Saturdays and takes Friday off so the kids are only at the childminder 3 days per week. So it’s a good compromise for us. Or maybe you could find a part time job that you could work mornings?

Milly33

Milly33 wrote: »

I dont get it either to be honest with you. How people afford to go back to work, middle class that is.. My husband earns to much (probably 20 euro) over budget to get anything. It has always been the same case. Think from what we have seen if your on fairly low wages perhaps or claiming non stop then it might be of benefit but if you are middle class then it just doesn't work out.. Unless of course you yourself really want to go back to work.

Unless one of you is on a very low salary then I can’t see how you would see it as a struggle for people to afford to go back to work when they will be financially better off because of it. It’s like people thinking they will lose money when they go into the higher rate of tax. You are talking about middle class and the op even mentioned applying for job up to 40k so let’s take that number.

Both op and her husband on 40k each the family income will be (excluding pension and child benefit for simplicity) 5273 euro per month. Take the highest cre figure of 1250 (which is extortionate btw, should be possible to get child care for much less) the family income is 4023 euro per month.

If the op stays at home and her husband continues to earn 40k the family income will be 2852 euro per month. So taking in 1171 euro less per month. Even allow a bit for travel, lunches etc should still be close to 1k better off working straight off leaving aside the other advantages like keeping a career going, pension contributions, benefits of getting out of the house and being around adults etc etc.

If people want to stay home the by all means do but the income of one of the couple would need to be very low to have “costing more to work” as a reason. Even more so if not married as the working partner will not be getting the tax band or credits so my above calculations are for a married couple.

lazygal

jlm29 wrote: »

And it’s short lived. Crèche costs will start to go down next year with ecce, and then school.

We worked out that should we send our children to a private school it will cost less than we currently pay for childcare. And by that stage we'd hope to have the mortgage mainly paid off and so on and have had a couple of pay rises hopefully. Had I stayed at home for the seven years since my first was born I would be down tens of thousands of euro by now.

KaneToad

ncmc wrote: »

It can be very dispiriting when you go back to work first and find you’re pretty much paying for a child minder. As others have suggested, could you look for a lady who minds kids in their own home? I pay €55 for two children to be minded (5 and 2) and she treats them like her own grandkids. While I loved being at home with the kids while on maternity, I don’t think I’d like to do it full time, while work can be a pain, I like the social aspect it gives me and a chance to use my brain. Would it be an option to work 3 days at first? I work 4 days a week and my husband works Saturdays and takes Friday off so the kids are only at the childminder 3 days per week. So it’s a good compromise for us. Or maybe you could find a part time job that you could work mornings?

€55 for 2 kids, is that for 5 days???

SusanC10

OP - you really need to sit down and look at everything - write it all down. Then go away and read it again.
Finances, income, outgoings, childcare and your emotions too.

I have been a SAHM for 9 years. I don't regret it at all in terms of the Kids etc. But and it is a but, I want to return to the work force now and I am feeling that I lack the confidence to do so. So keep that in mind.

On Finances, we have pooled all our money since we got married and it is very much our money although obviously I don't earn any of it at the moment. But this pooling did help when I stopped working. I don't feel dependent on my husband and never have. My redundancy money was ours too not mine alone.

My husband has as many of my Tax Credits as can be transferred and the cut off point and also the Home Carers Tax Credit which is now €1,600.

I was made redundant when our youngest was under 2 so it wasn't my choice to stop working. It was in the middle of the recession and my Husband had had paycuts too at the same time. I had been working 3 days a week from when our eldest was born until then.

I did look to go back a few years ago but when we did the sums, we would have been left with approx €50 per week extra after childcare, commuting costs etc.
We do not have any family living anywhere near us. My husband commutes to work, works long hours and travels a fair bit.

We did look at someone coming into the house but then we would be Employers and need to deal with Tax, PRSI etc
We made the decision that I would stay at home until the eldest was in Secondary thereby reducing the Childcare Costs.

OP - just really think about and talk about all angles and then make the best decision for you and your family with the information you have to hand.

crisco10

As someone mentioned earlier, also consider will you be earning Employer pension contributions when you do go back to work?

Plenty of people do the "month by month" calculations, but forgot to consider the lost pension contributions from your Employer which add up once compounded etc.

Sunny Disposition

It is very hard, childcare is now very expensive. Besides the cost there is stress in trying to get kids dropped off, collected, find alternatives at certain times.
People will start to opt out of the workforce for a few years, for sure.
Maybe the OP could work part time for a while, just to keep your hand in, as it were?

Loveinapril

lazygal wrote: »

My mother hated going back to work and it was always a juggle until we were in our teens. However now she's of pension age she's gotten a lump sum and her pension every month and has always had that financial cover of not being totally reliant on my father's income and career. That's been a massive influence and motivator for me to stay in paid employment.

Whereas my motivator in watching my mother live the opposite. She gave up work when she had her kids and we kind of became her life. She didn't really maintain any interests/ activities outside of the home and has had to really work at rekindling old friendships in the last few years.

I personally think my mental health would suffer if I stayed at home with the kids all day. I am on maternity leave now and although there is that novelty factor, I am getting through it because I know I will be back at work next year (part time).

OP, you could get established in a job and take bits of parental leave eventually, whether in a block or a day a week. The childcare costs will reduce eventually but there may be far more personal benefits for you staying in a job in relation to career development and progression, social outlet, etc.

ncmc

KaneToad wrote: »

€55 for 2 kids, is that for 5 days???

Sorry I worded that badly, I pay €55 per day for two kids. I think I worked out the creche would have been about €80 per day.

anndub

Milly33 wrote: »

I dont get it either to be honest with you. How people afford to go back to work, middle class that is.. My husband earns to much (probably 20 euro) over budget to get anything. It has always been the same case. Think from what we have seen if your on fairly low wages perhaps or claiming non stop then it might be of benefit but if you are middle class then it just doesn't work out.. Unless of course you yourself really want to go back to work.

I'm confused by this. What do people ever get other then the carers tax credit when one parent decides on a career break? What can be claimed nonstop?

I ask because I'm in limbo myself at the moment as regards whether to take time out now I've had baby 2, but being a middle income household the decision isn't based on finances as it would be financially viable for any 2 child household to have two middle income parents at work, even in Dublin. On an income of 40k (as an example) and after travel costs etc I would still have 1k to add to the kitty every month.

I would have thought the decision becomes financial only in lower earning households.