Commuting costs eating up extra pay
Discussion
Help me make this make sense...
I have recently received a job offer paying about 30k more than I currently earn but it requires me to be in London 2 days a week (I'm currently fully remote). Without going into loads of details, I already earn beyond the £100k threshold but use my pension contributions to keep my taxable income below £125k (I normally try to aim for about 105k). The new role will see my taxable income increase by ~30k so without going mad on my pension I'll be losing what's left of my personal allowance and incurring additional rate tax.
A season ticket on the train (even one of those 2 day a week jobbies) is going to set me back about £7k (which is a joke in itself seeing as I only live an hour away).
Having done all of the calculations, after tax and NI I'll just about break even in terms of disposable income.
Am I missing something? Is there a smart way around this? I'll be utterly depressed if I need to turn this down due to the UK's desire to punish anybody who isn't scrounging
...And yes, I know that this is very much a first world problem and I'm lucky to earn a decent salary but it is a bit miserable to be prevented financially from moving up the career ladder.
I have recently received a job offer paying about 30k more than I currently earn but it requires me to be in London 2 days a week (I'm currently fully remote). Without going into loads of details, I already earn beyond the £100k threshold but use my pension contributions to keep my taxable income below £125k (I normally try to aim for about 105k). The new role will see my taxable income increase by ~30k so without going mad on my pension I'll be losing what's left of my personal allowance and incurring additional rate tax.
A season ticket on the train (even one of those 2 day a week jobbies) is going to set me back about £7k (which is a joke in itself seeing as I only live an hour away).
Having done all of the calculations, after tax and NI I'll just about break even in terms of disposable income.
Am I missing something? Is there a smart way around this? I'll be utterly depressed if I need to turn this down due to the UK's desire to punish anybody who isn't scrounging
...And yes, I know that this is very much a first world problem and I'm lucky to earn a decent salary but it is a bit miserable to be prevented financially from moving up the career ladder.
Nicetobenice said:
Can you show your workings?
Even at the full "tax trap" rate you should be keeping 40%
There's a few other pieces (national insurance, BIK private health etc) and I'm assuming that I'll continue to pay the same % pension contributions. After all that the extra take home pay (after paying for a season ticket) is about £120 a month... Which isn't really worth it for me given the time implicationsEven at the full "tax trap" rate you should be keeping 40%
LennyM1984 said:
There's a few other pieces (national insurance, BIK private health etc) and I'm assuming that I'll continue to pay the same % pension contributions. After all that the extra take home pay (after paying for a season ticket) is about £120 a month... Which isn't really worth it for me given the time implications
I suppose it depends how good it is for career progression.LennyM1984 said:
...And yes, I know that this is very much a first world problem and I'm lucky to earn a decent salary but it is a bit miserable to be prevented financially from moving up the career ladder.
But the new job is presumably further up the ladder than your current job, and you're not being financially prevented - you can take it, and for £120pcm extra.I suppose you could take your maths to them and see if you can negotiate a bit more - depends how lucky you feel! And do you have a Plan B if they say no?
Simpo Two said:
But the new job is presumably further up the ladder than your current job, and you're not being financially prevented - you can take it, and for £120pcm extra.
I suppose you could take your maths to them and see if you can negotiate a bit more - depends how lucky you feel! And do you have a Plan B if they say no?
Plan B is to just stay where I am. It's comfortable but dull, I get to work from home, and it's not particularly stressful. There doesn't appear to be much point in trying to earn any more so I may as well just coast for a bit longerI suppose you could take your maths to them and see if you can negotiate a bit more - depends how lucky you feel! And do you have a Plan B if they say no?
LennyM1984 said:
Plan B is to just stay where I am. It's comfortable but dull, I get to work from home, and it's not particularly stressful. There doesn't appear to be much point in trying to earn any more so I may as well just coast for a bit longer
May as well do that if career progression isn't a motorvating factor. LennyM1984 said:
Plan B is to just stay where I am. It's comfortable but dull, I get to work from home, and it's not particularly stressful. There doesn't appear to be much point in trying to earn any more so I may as well just coast for a bit longer
Well, sometimes comfort is better than ambition 
A friend of mine works for Sodexo. He's had the same job for 20+ years, earns about £30Kpa, but it's easy and they feed him a three-course breakfast and lunch and he gets a free laptop and phone.
Edited by Simpo Two on Saturday 11th April 21:19
LennyM1984 said:
Plan B is to just stay where I am. It's comfortable but dull, I get to work from home, and it's not particularly stressful. There doesn't appear to be much point in trying to earn any more so I may as well just coast for a bit longer
In a similar-ish sort of position and likely will just cap earnings at 99k, plough into pension and then drop to 4 days a week whenever the sums add up.If the extra £30k job is heaps more responsibility and stress then it doesn't seem worth it for the net gain, which is clearly wrong as people should be encouraged to work as best as they can
MightyBadger said:
Bloody hell a 7k 1 year train ticket!
For just two days a week can you get a cheap Ulez free car or go in your own and just pay for parking or is that a massive inconvenience and long slog, bad for rep etc?
A new Tesla is only £259 a month.
The problem then is parking. The office is central London (near Victoria) so best case scenario you are looking at £50 parking + £15 congestion charge + electricity/petrol.For just two days a week can you get a cheap Ulez free car or go in your own and just pay for parking or is that a massive inconvenience and long slog, bad for rep etc?
A new Tesla is only £259 a month.
The cost of season tickets is genuinely obscene and the trainline in question (I live near Oxford so it's the GWR line into Paddington) is notoriously unreliable (I would say that it's close to 50/50 whether the train arrives on time or arrives at all).
Iain0140 said:
If the extra £30k job is heaps more responsibility and stress then it doesn't seem worth it for the net gain, which is clearly wrong as people should be encouraged to work as best as they can
Yeah sadly that is the conclusion I'm coming to. Will speak to the recruiter next week and explain where I'm at and see what they say. Worst case scenario I stay where I am LennyM1984 said:
The problem then is parking. The office is central London (near Victoria) so best case scenario you are looking at £50 parking + £15 congestion charge + electricity/petrol.
The cost of season tickets is genuinely obscene and the trainline in question (I live near Oxford so it's the GWR line into Paddington) is notoriously unreliable (I would say that it's close to 50/50 whether the train arrives on time or arrives at all).
Ah ok, all ways are expensive then. That extortionate season ticket and unreliability would put trains out of the equation completely for me.The cost of season tickets is genuinely obscene and the trainline in question (I live near Oxford so it's the GWR line into Paddington) is notoriously unreliable (I would say that it's close to 50/50 whether the train arrives on time or arrives at all).
A bit of a conundrum.
Putting the money aspect to one side, consider your lifestyle. Are you seeking career progression? Trying to climb the greasy corporate ladder? Got a partner and kids at home waiting for you every night,..?
Your age is a factor too: do you really have the desire or the stamina to get up early, brave the trains and schlep in to the city now that you are accustomed to wfh?
I look back at jobs/commutes that I did in my 30s and 40s that I couldn’t/wouldn’t consider doing again today (now in my mid-50s).
Oh, and for £7k you probably won’t get a seat on that train, and services will be disrupted, delayed and/or canceled around 30% of the time IME!
Your age is a factor too: do you really have the desire or the stamina to get up early, brave the trains and schlep in to the city now that you are accustomed to wfh?
I look back at jobs/commutes that I did in my 30s and 40s that I couldn’t/wouldn’t consider doing again today (now in my mid-50s).
Oh, and for £7k you probably won’t get a seat on that train, and services will be disrupted, delayed and/or canceled around 30% of the time IME!
At least you’ve done the calculations, which is sensible. I had a similar quandary a few years ago trying to decide whether to look at jobs in Edinburgh versus Glasgow. Even back then I came up with some daft figure like it costing about £7k pre-tax to commute 3 days a week. The maths has changed on that one now but it was a similar situation and there’s definitely a lot of cases where substantially lower headline pay and a local/WFH job results in higher take-home after expenses than trying to commute to a big city 50 miles away.
People simply don't understand what happens to pay between 100K and 125K unless they've looked at it in detail.
That £7K season ticket requires £18K of gross pay in the 100-125k range, because of the loss of the personal allowance.
Once the season ticket is taken into account, the other £12K will be taxed at either 62% or 47% or some mix of the two, so your takehome will be £4.5K and £6.4K higher per year, aka about £400 to £500 more per month. Doesn't sound worth the commute at all to me.
For 2 days a week, a season ticket may actually not be the right option. Does your train line do blocks of 8 tickets to be used within 28 days? (mine does).
That £7K season ticket requires £18K of gross pay in the 100-125k range, because of the loss of the personal allowance.
Once the season ticket is taken into account, the other £12K will be taxed at either 62% or 47% or some mix of the two, so your takehome will be £4.5K and £6.4K higher per year, aka about £400 to £500 more per month. Doesn't sound worth the commute at all to me.
For 2 days a week, a season ticket may actually not be the right option. Does your train line do blocks of 8 tickets to be used within 28 days? (mine does).
Gassing Station | Finance | Top of Page | What's New | My Stuff