Is it worth working more?
Going back to work, adding days or taking a pay rise can be worth far less than the headline once childcare and tax are netted off — and crossing £100,000 of income wipes out Tax-Free Childcare and your free hours overnight. Enter your before and after to see what you’d actually keep.
Your situation
The full picture
What this means
Models tax, National Insurance and student loan on the extra pay, the childcare you’ll pay, Tax-Free Childcare (20%, capped £2,000/child), and Child Benefit lost to the higher-income charge. Childcare schemes need both parents working (about 16 hrs/week at minimum wage) and neither over £100,000 of adjusted net income. Free funded hours (England, 9 months–4 years) vary by area — enter their yearly value to include the £100k loss. This is guidance, not financial advice.
The sum nobody does before saying yes
Go back to work, add a day, take the promotion: the headline number is always the gross one, and for a parent paying for childcare the gross number is close to fiction. Real gain is pay, minus tax and NI, minus the childcare the extra work forces you to buy, plus whatever support schemes give back. This calculator nets the whole thing off, which is a sum surprisingly few families sit down and do.
Worked example: back to work on £30,000
A parent returns to work at £30,000 with two children in nursery costing £14,000 a year, partner on £45,000. Take-home on £30,000 is £25,120. Tax-Free Childcare pays £2,800 of the nursery bill, leaving £11,200 to fund. Net position: about £13,920 a year better off, or £1,160 a month. Spread across 37.5 hours a week that's an effective £7.14 an hour, barely more than half the minimum wage. People still say yes at that rate, for the pension, the career and the adult conversation, and fair enough. Say yes to the true number, though, and not to £30,000, because £30,000 this is not.
The £100,000 childcare cliff
Every support scheme here has a trapdoor at the same spot. If either parent's adjusted net income passes £100,000, Tax-Free Childcare and the 30 free hours both vanish. Completely, for the whole year, from one pound over. For a family with two nursery-age children the lost support can be worth more than the pay rise that triggered it, a marginal rate beyond anything else in the tax system. The fix is usually a pension contribution that pins adjusted income just under the line, and charitable giving pulls the same direction, since Gift Aid reduces adjusted net income at the donation's grossed-up value; the sacrifice optimiser finds the amount. Couples juggling who earns what should also see the two-earner household calculator, and anyone reshaping their week has the pro-rata calculator for the hours themselves.
Common questions
Is it worth working more hours once childcare is included?
It depends on your extra take-home pay set against childcare costs and any benefits or funded hours you lose. The calculator nets all of these off to show your true gain, which can be surprisingly small, or even negative, around the £100,000 mark.
Why can earning over £100,000 leave me worse off?
Above £100,000 you lose your Personal Allowance and, in England, your funded childcare hours and Tax-Free Childcare. Together these can mean an extra pound of salary leaves you with very little once childcare is paid for.
What is Tax-Free Childcare worth?
The government adds £2 for every £8 you pay in, up to £2,000 per child a year (£4,000 if the child is disabled), as long as neither parent earns over £100,000. The calculator includes this top-up in your net position.
These results are estimates for general information only and are not financial advice. Check every figure yourself and seek appropriate advice from a qualified professional before making any decision. Read the full disclaimer.