I’m interested in whether anyone else thinks this is strange. Let’s consider a professional woman (or man, but this happens more to women), we’ll call her Sarah, who decides she wants to continue her career after having children and work five days a week. Sometimes she’ll have to leave early, come home late and so on, so she is likely to need serious childcare support. The option that most seem to go for in these circumstances is a nanny. Not cheap, but if you have two children it is not that much more than nursery plus attendant pieces, and significantly more reliable. Suppose Sarah is earning £75,000 per year. Respectable, but may go up in many professions as she gains in seniority if she stays working. So, my question is, how much money does she end up with per year, how much goes to the nanny and how much to the tax man?
The answer is as follows:
- Nanny £26,000
- Tax man £36,941
- Sarah £12,059
- Total £75,000
Does it make economic sense to make it so difficult for professional women to continue their careers after having children? I’m sure that lots of people will tell me that there are cheaper childcare options – there are, but most can’t cope with the demands of a professional career. If we wonder what keeps women out of many of the “top jobs”, maybe the breakdown above is part of the answer.
- Nanny wage taken as £10 per hour net, thus £500 per week for 8.00am – 6.00pm, which is fairly standard. Thus Nanny total is £500 x 52 = £26,000
- Employer and employee taxes on top of the Nanny wage are £235 per week = £12,220 per year.
- Thus £38,220 total cost of nanny needs to be paid from net earnings of £50,279 (taken from one of the net pay estimating websites), leaving Sarah with £12,059.