Should One of Us Quit? How the Second Income Is Calculated

Podsumowanie

When both parents work, the second salary doesn’t all come home. Income tax, National Insurance, childcare fees, commuting costs, and work expenses eat into it — sometimes dramatically. This calculator compares three scenarios: both parents working, Person A quitting, or Person B quitting. It shows which option leaves the household with the most disposable income.

Jak to działa

The calculator models three scenarios and compares the household disposable income in each:

1. Both work — combined take-home pay minus childcare, both commutes, and both sets of work expenses
2. Person A quits — only Person B’s take-home pay, but no childcare costs (parent at home), no commute or expenses for Person A
3. Person B quits — only Person A’s take-home pay, same logic in reverse

For each scenario, household disposable income is calculated as:

The second job gain shows how much each person’s job really adds to the household:

If the second job gain is negative, the household is financially better off with that person not working.

Childcare costs in the UK

Average UK childcare costs vary significantly by type, age of child, and region.

Full-time nursery costs (2025)

Source: Coram Family & Childcare Survey 2025.

What you lose if one parent quits

Two major government schemes require both parents to be working:

• 30 free childcare hours (worth £6,000–£8,000/year at nursery rates) — both parents must earn at least £195/week and neither can earn over £100,000
• Tax-Free Childcare (up to £2,000/child/year) — same dual-working requirement

If one parent quits, the family drops from 30 free hours to just the universal 15 hours (for 3-4 year olds only), and loses the Tax-Free Childcare top-up entirely. These hidden costs are not modelled in the calculator’s numbers but are flagged in the disclaimer.

Przykład obliczeniowy

When quitting makes sense

With 2 children at £15,000 childcare each, Person B earning £25,000, and £4,000 in commute/expenses, Person B’s job actually costs the household £12,480/year. The calculator correctly recommends Person B quitting.

Objaśnienie danych wejściowych

• Person A / B gross salary — annual salary before any deductions
• Number of children — determines total childcare cost (cost per child × number)
• Childcare cost per child — annual cost per child for nursery, childminder, or after-school care. Use the pre-subsidy cost (before free hours or Tax-Free Childcare)
• Commute cost — annual cost of getting to work (rail, fuel, parking, etc.)
• Work expenses — annual costs you wouldn’t have if you stayed home: bought lunches, professional clothing, parking, subscriptions

Objaśnienie wyników

• Household disposable income — what’s left after tax, NI, childcare, commuting, and work expenses for each scenario
• Best option — which scenario (both work, A quits, or B quits) leaves the most disposable income
• Second job gain — how much each person’s job really adds to the household after all associated costs
• Break-even childcare cost — the childcare cost per child at which quitting becomes financially better than both working

Założenia i ograniczenia

• Tax calculation uses 2025/26 UK rates — income tax bands and NI thresholds for England, Wales, and Northern Ireland (not Scotland)
• No pension modelling — salary sacrifice pension contributions reduce taxable income but also reduce take-home pay. The calculator assumes no pension deductions.
• No student loan modelling — student loan repayments further reduce take-home pay but are not included
• Childcare is modelled as a flat annual cost — the calculator does not model free hours, Tax-Free Childcare, or childcare vouchers. Users should input their actual out-of-pocket cost.
• No Child Benefit or HICBC — these are not included in the calculation. Child Benefit adds £1,355-£2,252/year depending on number of children, but HICBC claws it back for earners above £60,000.
• No Marriage Allowance — if one parent quits, they could transfer £1,260 of unused personal allowance to their partner (saving £252/year). This is not modelled.
• Career break costs are not quantified — lost pension contributions, reduced future earnings, and gaps in employment history are flagged but not calculated
• Non-financial factors are not modelled — wellbeing, child development, career satisfaction, and personal preference are important but outside the scope of a financial calculator

Weryfikacja